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4-29-2026 HUCCP
HUTCHINSON UTILITIES COMMISSION AGENDA REGULAR MEETING April 29, 2026 3:00 p.m. 1. CONFLICT OF INTEREST 2. APPROVE CONSENT AGENDA a. Approve Minutes b. Ratify Payment of Bills 3. APPROVE FINANCIAL STATEMENTS 4. OPEN FORUM 5. COMMUNICATION a. City Administrator b. Divisions C. Human Resources d. Legal e. General Manager 6. POLICIES a. Review Policies i. Section 4 of Exempt Handbook ii. Section 4 of Non -Exempt Handbook b. Approve Changes 7. UNFINISHED BUSINESS 8. NEW BUSINESS a. Approval of Highland Park Industrial, LLC Natural Gas Transportation and Commodity Purchase Agreement b. Approval of 1st Amendments to UFC's Transportation and Commodity Agreements C. Approval of 1 Year Extension on Current UNG Transportation Contract d. Approval of Fairfax Interconnect Agreement e. Approval of Sterling Energy LLC Contract 1st Amendment f. Review of 2025 Annual Benchmarking Report g. Review of 2025 Safety Award of Excellence h. Award Contract for Plant #1 Substation 47MVA Transformer 9. ADJOURN MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, March 25, 2026 Call to order — 3:00 p.m. President Don Martinez called the meeting to order. Members present: President Don Martinez; Secretary Matt Cheney; Vice President Tom Lambert; Commissioner Jeremy Crosby; GM Jeremy Carter; Attorney Marc Sebora Absent: Commissioner Kathy Silvernale Jeremy Crosby was sworn in as commissioner by Attorney Marc Sebora 1. Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Consent Agenda. Motion carried unanimously. 3. Approve 2025 Financial Audit Justin McGraw with Conway, Deuth & Schmiesing Audit Firm presented the 2025 Hutchinson Utilities Commission Independent Audit Report. Mr. McGraw also provided financial statement packets that show more detail along with how the review went. Mr. McGraw stated the audit was conducted in accordance with the Generally Accepted Auditing Standards and Government Auditing Standards. The financial statements of the Commission are presented fairly in the firms' opinion. Mr. McGraw reviewed the Statement of Net Position. Assets decreased slightly in 2025 with liabilities decreasing as well. Mr. McGraw reviewed the Cash and Investment Balances. Restricted balance remained similar with Designated and Operating balances decreasing. Mr. McGraw reviewed the Electric and Natural Gas Divisions Operating Revenues and Expenses. Mr. McGraw summarized the Communications portion of the report along with recommendations for the upcoming year. Mr. McGraw stated the audit went well and the Staff was very helpful. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve the 2025 Financial Audit. Motion carried unanimously. 4. Approve Financial Statements Mr. Martig presented the Financial Statements. Mr. Martig noted the GRE transmission estimate was not reversed from January, February is correct but year to date is incorrect. Electric Division revenues were up but were offset by an increase in mostly purchased power and transmission costs. Natural Gas Division 1 usage and revenues were down compared to last year but was offset by a decrease in purchased gas costs. GM Carter provided a Storm Fern update and the impact to customers. GM Carter also elaborated on the Rate Stabilization Fund and market sales. Cash Balance and investments were reviewed. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Financial Statements. Motion carried unanimously. 5. Open Forum a. Mayor Gary Forcier 6. Communication a. City Administrator— Matthew Jaunich — i. Preparing for summer street and building projects. b. Divisions i. Dan Lang, Engineering Services Manager — Nothing to Report ii. Dave Hunstad, Electric Transmission/Distribution Manager — Nothing to Report iii. Mike Gabrielson, Production Manager 1. Plant 1 water pipe leak update. iv. Byron Bettenhausen, Natural Gas Manager 1. Annual Training 2. Received MNOPS letter stating no issues on the 2024 audit. 2025 MNOPS audit is scheduled for May 2026. Mayor Forcier inquired about the progress on the trail. Mr. Lang and GM Carter provided an update. V. Jared Martig, Financial Manager - Nothing to report c. Human Resources — Angie Radke - i. Working with new D&A Consortium and 3rd Party Administrator ii. Compensation Study d. Legal — Marc Sebora — i. Nothing to report e. General Manager — Jeremy Carter i. Update on Natural Gas prepaid deal that will be closing tomorrow, hedging and spot market was reviewed ii. Strategic Planning meeting to be held in April or May 7. Policies a. Review Policies i. Section 3 of Exempt Handbook ii. Section 3 of Non -Exempt Handbook No changes recommended at this time. 2 8. Unfinished Business 9. New Business a. Approval of New Ulm Natural Gas Transportation Capacity Agreement GM Carter presented Approval of New Ulm Natural Gas Transportation Capacity Agreement. The current transportation capacity agreement has been in place since April 2004 (inception of pipeline), which is scheduled to expire on March 31, 2026. The new transportation capacity agreement is a 5-year agreement that includes reserving 15,000 Dth's per day of capacity on HUC's transmission line extending from Trimont, MN to Hutchinson (93 miles). The new agreement phases in a reservation charge increase over two years, which will then bring the reservation charge consistent with the other customers on the transmission line. The agreement also addresses additional fees that could be incurred for daily and monthly imbalances outside of the agreed upon tolerances. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve New Ulm Natural Gas Transportation Capacity Agreement. Motion carried unanimously. b. Approval of New Ulm Natural Gas Interconnect Agreement GM Carter presented Approval of New Ulm Interconnect Agreement. In order for HUC to supply and transport natural gas to the City of New an interconnect agreement needs to be in place between both parties and will run concurrently with the New Ulm Natural Gas Transportation Capacity Agreement. The interconnect agreement establishes the commodity custody transfer point and the interconnection point between Hutchinson's natural gas pipeline facilities and New Ulm's natural gas pipeline facilities. The agreement also states the equipment necessary at the interconnection station to transport and read the flow of natural gas at predetermined pressures. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve New Ulm Natural Gas Interconnect Agreement. Motion carried unanimously. c. Approve Req#10521 -Close Interval Survey Mr. Bettenhausen presented Approval of Req#10521 — Close Interval Survey. A close interval survey (CIS) is conducted on pipelines to assess the entire structure's cathodic protection status by recording pipe -to -soil potential profile. In 3 2025, 1/5 of the transmission line was completed and now HUC would like to do the next 1/5 of the transmission line which is 20 miles. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve Req#10521 -Close Interval Survey. Motion carried unanimously. d. Approve Req#10519 - Blasting and Recoat at MLBV 212 Site Mr. Bettenhausen presented Approval of Req#10519 — Blasting and Recoat at MLBV 212 Site. The coating at MLBV 212 is in need of removal and replacement. Staff will sandblast any above ground piping or equipment and apply new coatings to keep the equipment safe and in compliance. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Req#10519 — Blasting and Recoat at MLBV 212 Site. Motion carried unanimously. e. Approve Selling of Surplus Equipment Mr. Hunstad presented Approval of Selling of Surplus Equipment. HUC has a 2006 John Deere 310SG Tractor backhoe that is in need of a new transmission. The quote received for a re -manufactured transmission, including installation was $30,622.39. Given the age of the equipment and significant cost of repair, Staff is recommending that the piece of equipment is sold as is. The backhoe was already scheduled for disposal in 2027 and planned to be replaced with a different type of equipment. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve Selling of Surplus Equipment. Motion carried unanimously. f. Approve Sterling Energy LLC Contract 1st Amendment —Tabled for this meeting g. Approve Req#10531 - GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. Mr. Gabrielson presented Approval of Req#10531 — GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. The work will be completed by GE. Some of the cost may be covered under warranty. There are also a few other options that are being looking into, but Staff would like to move forward with this proposal for now. Conversations were held on timing and other options that may be available. 12 Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Req#10531 — GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. Motion carried unanimously. 10. Adjourn There being no further business, a motion by Commissioner Cheney, second by Commissioner Lambert to adjourn the meeting at 4-00p.m. Motion carried unanimously. Matt Cheney, Secretary ATTEST: Don Martinez, President 5 MINUTES Strategic Planning Meeting — Hutchinson Utilities Commission Held at Southwest Initiative Foundation Tuesday, April 14, 2026 Commenced — 9:00 a.m. Members present: President Don Martinez; Vice President Tom Lambert; Secretary Matt Cheney; Commissioner Kathy Silvernale; Commissioner Jeremy Crosby; GM Jeremy Carter; Others present: Dave Hunstad, Dan Lang, Jared Martig, Mike Gabrielson, Byron Bettenhausen and Angie Rad ke. 5-Year HUC Outlook • GM Carter started off by reviewing the Mission, Value Statement Goals and values of HUC. • GM Carter reviewed the Operating budget forecast. Conversations were held on the Electric and Natural Gas cash balances, restricted reserves, debt service payments, and operating and capital reserves. Operating reserves included more conversations on operating cash available, catastrophic, rate stabilization and PILOT reserve amounts. • GM Carter reviewed the HUC Fleet Program. The fleet program has 3 priority ratings; Critical, Very Important and Important. Critical includes equipment that is frequently/daily used to maintain infrastructure and system reliability. Very Important includes equipment that is used in a less frequent manner but needed for field operations/infrastructure. Important includes administrative/transportation vehicles for HUC employees. GM Carter reviewed the graphs of the overall annual funding levels, which includes the trade in value along with an inflation factor. Staff has also reviewed the HUC Fleet Program and has identified equipment/trucks that can be kept longer if needed to maintain a current consistent funding level. • GM Carter provided an update on the funding mechanisms which included Rate Stabilization funds, cash designations, unrestricted cash balance and retail rates which led into cost -of -service study discussions. Cooling Tower Repair Project • Board and Staff discussed the Cooling Tower Repair Project. Conversations were held on pipe coating and cathodic protection concerns, soil samples, costs — is there an insurance claim, and timelines. Transmission Projects • Board and Staff discussed the Transmission projects along with the financing options that are available along with the timing of the projects. Generation Wholesale Model • Board and Staff discussed the Generation Wholesale models which included Generation Fleet Make-up, Wholesale Generation Financial Outlooks, Generation Fleet Cost Options and Natural Gas Pipeline Capacity. Conversations were also held on Bonding and Financing Options. Adjourn There being no further business, a motion by Commissioner Silvernale, second by Commissioner Cheney to adjourn the meeting at 1:00 p.m. Motion carried unanimously. 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x a) 3 a) +) a) +) U w w x x w W +) w o o w R, a a o ro Q o a (0 (0 x u w O w > w > > x u w a w a x u (0w O o o x u .11 u O u am x 0 a El w a u H � w N H w co Q z a, a cn u aD H H co W H H Z FG H O H W W Q U W H Pa U1 Z H H U H 0 a .Y. 0 W u H u H U1 H ° 'Ji H W 11 'a x W U) W 04 w 3 a a 0 z U� O H H a w U H w N a z . w z WW H H Q Q Q ( W a C7 Q H H H (0z w O x O a a Pa a a a x U) Uz x z z x x zH- u LO OD LO f" OD 61 O O O O O H H H H H H u OD OD OD oo oo oo oo oo oo oo oo Ln z z z z z z z z z z z � .. � � C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 C7 r l o +) U) CD 0 N fo J-) Q N O N O N O N O N O N O N O N O N O N O O N N N O ,D Q U w O O O O O O O O O O O Ln � cn Ln Q0 31 o 31 O c� �� Q0 Lncn r N N M c pc) l0 O H H H � N a +-) oc) oc) Q O O a-1 I I � H o � N M O � � � I I H H 0 0 W H E� H H N D EO � N z\ 0 � N z\ H � x � U N � �D o a N W a 0\� .H w �4 N F U \ cn a ro Q a 0 a z w w w w � 0 Q a z x m 0 u� W Q 0 x 0 w x u N O N H O Q W a 0 H N z w N a � w w Q HUTCHINSON UTILITIES COMMISSION COMBINED DIVISIONS FINANCIAL REPORT FOR MARCH, 2026 Combined Division Customer Revenue Sales for Resale NG Transportation Electric Division Transfer Other Revenues Interest Income TOTAL REVENUES Salaries & Benefits Purchased Commodities Transmission Generator Fuel/Chem. Depreciation Transfers (Elect./City) Operating Expense Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) 25% of Year Comp. 2026 2025 Di %Chna 2026 2025 Di %Chna Full Yr Bud %of Bud $ 3,479,510 $ 3,037,797 $ 441,713 $ 285,888 $ 289,413 $ (3,525) $ 164,496 $ 169,924 $ (5,428) $ 60,667 $ 60,639 $ 28 $ 52,677 $ 54,824 $ (2,147) $ 46,044 $ 75,172 $ (29,128) $ 4,089,281 $ 3,687,770 $ 401,512 14.5% $ 12,113,421 $ 10,420,282 $ 1,693,138 16.2% $ 40,209,447 30.1% (1.2%) $ 1,116,944 $ 901,947 $ 214,997 23.8% $ 4,339,200 25.7% (3.2%) $ 496,788 $ 517,365 $ (20,577) (4.0%) $ 2,037,588 24.4% 0.0% $ 182,000 $ 181,917 $ 83 0.0% $ 728,000 25.0% (3.9%) $ 170,105 $ 142,110 $ 27,995 19.7% $ 573,955 29.6% (38.7%) $ 130,093 $ 204,186 $ (74,093) (36.3%) $ 583,457 22.3% 10.9% $ 14,209,350 $ 12,367,807 $ 1,841,543 14.9% $ 48,471,647 29.3% $ 697,594 $ 624,051 $ 73,543 11.78% $ 2,081,628 $ 1,895,728 $ 185,900 9.8% $ 8,524,717 24.4% $ 1,865,544 $ 1,639,079 $ 226,465 13.8% $ 7,641,106 $ 6,188,177 $ 1,452,929 23.5% $ 20,816,157 36.7% $ 321,891 $ 200,020 $ 121,871 60.9% $ 849,775 $ 548,534 $ 301,241 54.9% $ 4,200,000 20.2% $ 42,428 $ 60,849 $ (18,421) (30.3%) $ 251,526 $ 212,256 $ 39,270 18.5% $ 2,008,656 12.5% $ 353,650 $ 353,506 $ 144 0.0% $ 1,061,242 $ 1,056,485 $ 4,758 0.5% $ 4,190,000 25.3% $ 222,552 $ 222,524 $ 28 0.0% $ 667,657 $ 667,573 $ 84 0.0% $ 2,670,626 25.0% $ 362,112 $ 316,813 $ 45,299 14.3% $ 809,442 $ 822,974 $ (13,532) (1.6%) $ 3,791,274 21.4% $ 38,805 $ 49,688 $ (10,883) (21.9%) $ 116,414 $ 149,064 $ (32,650) 21.9% $ 465,657 25.0% $ 3,904,576 $ 3,466,530 $ 438,045 12.6% $ 13,478,791 $ 11,540,791 $ 1,937,999 16.8% $ 46,667,087 28.9% $ 184,706 $ 221,239 $ (36,533) (16.5%) $ 730,559 $ 827,016 $ (96,456) (11.7%) $ 1,804,560 40.5% March March YTD YTD 2026 2025 Change 2026 2025 Change Gross Margin %: 30.9% 33.9% -3.1% 27.7% 32.0% -4.3% Operating Income Per Revenue $ (%): 3.5% 4.4% -0.9% 4.2% 5.7% -1.5% Net Income Per Revenue $ (%): 4.5% 6.0% -1.5% 5.1% 6.7% -1.5% 2026 HUC Budget Target 32.2% 2.8%N 3.7%N uuIIUuIINNI HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION FINANCIAL REPORT FOR MARCH, 2026 2026 2025 Di . %Chna 2026 2025 Di %Chna FullYrBud %of Bud Electric Division Customer Revenue $ 2,139,704 $ 1,859,115 $ 280,589 15.1% $ 6,482,239 $ 5,807,960 $ 674,279 11.6% $ 27,471,918 23.6% Sales for Resale $ 285,888 $ 289,413 $ (3,525) (1.2%) $ 1,116,944 $ 901,947 $ 214,997 23.8% $ 4,339,200 25.7% Other Revenues $ 23,110 $ 25,494 $ (2,384) (9.4%) $ 79,966 $ 60,288 $ 19,678 32.6% $ 202,862 39.4% Interest Income $ 24,416 $ 38,980 $ (14,564) (37.4%) $ 69,228 $ 106,275 $ (37,047) (34.9%) $ 308,457 22.4% TOTAL REVENUES $ 2,473,119 $ 2,213,002 $ 260,117 11.8% $ 7,748,378 $ 6,876,470 $ 871,907 12.7% $ 32,322,437 24.0% Salaries & Benefits $ 517,283 $ 476,245 $ 41,039 8.6% $ 1,540,120 $ 1,445,143 $ 94,978 6.6% $ 6,178,442 24.9% Purchased Power $ 1,060,519 $ 873,321 $ 187,198 21.4% $ 3,571,646 $ 3,095,397 $ 476,249 15.4% $ 13,035,315 27.4% Transmission $ 321,891 $ 200,020 $ 121,871 60.9% $ 849,775 $ 548,534 $ 301,241 54.9% $ 4,200,000 20.2% Generator Fuel/Chem. $ 42,428 $ 60,849 $ (18,421) (30.3%) $ 251,526 $ 212,256 $ 39,270 18.5% $ 2,008,656 12.5% Depreciation $ 254,443 $ 255,673 $ (1,230) (0.5%) $ 763,622 $ 762,987 $ 635 0.1% $ 3,060,000 25.0% Transfers (Elect./City) $ 172,817 $ 172,789 $ 28 0.0% $ 518,450 $ 518,367 $ 83 0.0% $ 2,073,802 25.0% Operating Expense $ 285,633 $ 224,666 $ 60,968 27.1% $ 591,689 $ 551,546 $ 40,144 7.3% $ 2,553,967 23.2% Debt Interest $ 30,138 $ 32,771 $ (2,633) (8.0%) $ 90,414 $ 98,314 $ (7,900) jLgL $ 361,657 25.0% TOTAL EXPENSES $ 2,685,152 $ 2,296,334 $ 388,819 16.9% $ 8,177,243 $ 7,232,543 $ 944,700 13.1% $ 33,471,839 24.4% $ (212,034) $ (83,332) (1JJ(28702) 154.4% $ (428,865) $ (356,072) $� 20.4% $ (1,149,402) 37.3% JJJJJ(/(7722,(((7(((93) 25%of Year Comp. y�JJNEETT PPJJ/ROFIT/(LOOJJSSS)((((( J$J/JJ// ('`ff��ilYf�111��W�IIIIIIIIIIIIIIIiifffffIIIIIIIIIIIIRPRfl�f1(IIIIIIIIIIIIIIIII�II 2026 2025 Di . %Chna 2026 2025 Di %Chna FullYrBud %of Bud Electric Division Residential 3,942,320 3,870,882 71,438 1.85% 12,690,242 12,848,558 (158,316) (1.23%) 54,016,284 23.5% All Electric 233,288 218,087 15,201 6.97% 878,063 932,985 (54,922) (5.89%) 2,281,979 38.5% Small General 1,406,491 1,411,375 (4,884) (0.35%) 4,321,212 4,571,410 (250,198) (5.47%) 17,753,235 24.3% Large General 7,734,800 7,115,490 619,310 8.70% 22,301,230 19,039,850 3,261,380 17.13% 92,221,607 24.2% Industrial 7,975,000 8,104,000 (129,000) (1.59%) 23,049,000 24,949,000 (1,900,000) (7.62%) 97,880,814 23.5% Total KWH Sold 21,291,899 20,719,834 572,065 2.76% 63,239,747 62,341,803 897,944 1.44%1 264,153,919 23.9% March March YTD YTD 2026 HUC 2026 2025 Change 2026 2025 Change Budget Target Gross Margin %: 20.6% 27.7% -7.0% 22.0% 25.5% -3.4% 24.7% 24%-28% Operating Income Per Revenue $ (%): -9.0% -4.7% -4.3% -6.0% -5.6% -0.4% -3.6% 0%- 1% Net Income Per Revenue $ (%): -8.6% -3.8% -4.8% -5.5% -5.2% -0.4% -3.6% 0%- 1% Customer Revenue per KWH: $0.1005 $0.0897 $0.0108 $0.1025 $0.0932 $0.0093 $0.1040 $0.1040 Total Power Supply Exp. per KWH: $0.0908 $0.0755 $0.0153 $0.0941 $0.0807 $0.0133 $0.0911 $0.0911 Net Loss increased by $128,702 over March 2025. Revenues and usage were up but offset by an increase in purchased power, transmission and operating costs. Operating costs were higher due to new cylinder heads taken out of inventory for Units 6 and 7. Sales for Resale of $285,888 consisted of $54,888 in market sales, $98,000 in capacity sales to Rice Lake, $70,000 in capacity sales to AEP, and $63,000 in capacity sales to Nextera. March 2025 Sales for Resale of $289,413 included $45,163 in market sales, $98,000 in capacity sales to Rice Lake and $146,250 in capacity sales to AEP. March 2024 Sales for Resale of $272,006 consisted of $27,756 in market sales, $98,000 in capacity sales to Rice Lake and $146,250 in capacity sales to AEP. Overall Purchased Power increased by $187,198. MRES purchases increased by $39,492 and market purchases/MISO costs increased by $147,706. The average cost of MISO power was $30.97/mwh (2,833 mwh's purchased), compared to $28.11/mwh (2,184 mwh's purchased) in March 2025. March 2026 PCA was $.00754/kwhr bringing in an additional $159,385 for the month and $621,889 YTD. The 3 month average PCA is $.0101 There was no PCA for March 2025 leaving the total collected at $151,798 YTD. Gas Division Customer Revenue Transportation Electric Div. Transfer Other Revenues Interest Income TOTAL REVENUES Salaries & Benefits Purchased Gas Operating Expense Depreciation Transfers (City) Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) HUTCHINSON UTILITIES COMMISSION GAS DIVISION FINANCIAL REPORT FOR MARCH, 2026 25% of Year Comp. 2026 2025 2 %Chna 2026 2025 2 . %Chna Full YrBud %of Bud $ 1,339,805 $ 1,178,682 $ 161,123 13.7% $ 5,631,181 $ 4,612,322 $ 1,018,859 22.1% $ 12,737,529 44.2% $ 164,496 $ 169,924 $ (5,428) (3.2%) $ 496,788 $ 517,365 $ (20,577) (4.0%) $ 2,037,588 24.4% $ 60,667 $ 60,639 $ 28 0.0% $ 182,000 $ 181,917 $ 83 0.0% $ 728,000 25.0% $ 29,567 $ 29,330 $ 236 0.8% $ 90,139 $ 81,822 $ 8,317 10.2% $ 371,093 24.3% $ 21,628 $ 36,192 $ (14,564) (40.2%) $ 60,864 $ 97,911 $ (37,047) (37.8%) $ 275,000 22.1% $ 1,616,163 $ 1,474,768 $ 141,395 9.6% $ 6,460,972 $ 5,491,337 $ 969,636 17.7% $ 16,149,210 40.0% $ 180,311 $ 147,807 $ 32,504 22.0% $ 541,508 $ 450,586 $ 90,922 20.2% $ 2,346,275 23.1% $ 805,025 $ 765,758 $ 39,267 5.1% $ 4,069,459 $ 3,092,780 $ 976,679 31.6% $ 7,780,842 52.3% $ 76,479 $ 92,147 $ (15,669) (17.0%) $ 217,753 $ 271,428 $ (53,675) (19.8%) $ 1,237,307 17.6% $ 99,207 $ 97,833 $ 1,374 1.4% $ 297,621 $ 293,498 $ 4,123 1.4% $ 1,130,000 26.3% $ 49,735 $ 49,735 $ 0 0.0% $ 149,206 $ 149,206 $ 0 0.0% $ 596,824 25.0% $ 8,667 $ 16,917 $ (8,250) 0.0% $ 26,000 $ 50,750 $ (24,750) 48.8% $ 104,000 25.0% $ 1,219,423 $ 1,170,197 $ 49,227 4.2% $ 5,301,548 $ 4,308,248 $ 993,299 23.1% $ 13,195,248 40.2% $ 396,740 $ 304,571 $ 92,168 30.3%1 1,159,425 $ 1,183,088 $ (23,664) (2.0%) $ 2,953,962 39.2% 25% of Year Comp. 2026 2025 2 . %Chnq 2026 2025 p %Chnq Full YrBud %of Bud Gas Division Residential 48,576,943 46,478,405 2,098,538 4.52% 196,327,564 208,661,923 (12,334,359) (5.91%) 410,283,000 47.9% Commercial 35,276,626 34,023,509 1,253,117 3.68% 140,523,510 147,344,656 (6,821,146) (4.63%) 317,957,000 44.2% Industrial 81,630,294 80,711,449 918,845 1.14% 270,692,353 282,588,030 (11,895,677) (4.21%) 820,578,000 33.0% Total CF Sold 165,483,863 161,213,363 4,270,500 2.65%1 607,543,427 638,594,609 (31,051,182) (4.86%)l 1,548,818,000 39.2% March March YTD YTD 2026 HUC 2026 2025 Change 2026 2025 Change Budget Target Gross Margin %: 46.7% 43.5% 3.2% 34.6% 40.4% -5.8% 47.7% 37%-40% Operating Income Per Revenue $ (%): 22.9% 18.4% 4.5% 16.5% 20.1% -3.6% 15.9% Net Income Per Revenue $ (%): 24.5% 20.7% 3.9% 17.9% 21.5% -3.6% 18.3% Contracted Customer Rev. per CF: $0.0067 $0.0066 $0.0001 $0.0081 $0.0068 $0.0013 $0.0069 Customer Revenue per CF: $0.0093 $0.0080 $0.0013 $0.0101 $0.0075 $0.0026 $0.0095 Total N.G. Supply Exp. per CF: $0.0051 $0.0050 $0.0001 $0.0068 $0.0050 $0.0018 $0.0053 Notes/Graphs: March Net Income increased by $92,168. Usage and revenues were increased compared to March 2025. The increased revenue was offset some by higher purchased gas and employee costs. March 2026 Fuel Cost Adjustment was $.37221/MCF bringing in an additional $32,296 for the month and $556,747 YTD. March 2025 Fuel Cost "Credit" Adjustment was $1.06754/MCF crediting customers $89,914 for the month and $354,454 YTD. HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED MARCH 31, 2026 Electric Gas Total Total Net Change Division Division 2026 2025 Total (YTD) Current Assets UnrestrictedlUndesignated Cash Cash (9,373,665.77) 15,657,651.11 6,283,985.34 12,120,376.27 (5,836,390.93) Petty Cash 680.00 170.00 850.00 850.00 - Designated Cash Capital Expenditures - Five Yr. CIP 2,750,000.00 700,000.00 3,450,000.00 3,450,000.00 - Payment in Lieu of Taxes 1,345,802.00 596,824.00 1,942,626.00 1,942,626.00 - Rate Stabilization - Electric 1,301,838.58 - 1,301,838.58 417,463.11 884,375.47 Rate Stabilization - Gas - 319,576.79 319,576.79 615,294.19 (295,717.40) Catastrophic Funds 800,000.00 200,000.00 1,000,000.00 1,000,000.00 - Restticted Cash Bond & Interest Payment 2017 393,885.44 - 393,885.44 394,818.74 (933.30) Bond & Interest Payment 2012 - 728,000.00 728,000.00 727,666.64 333.36 Debt Service Reserve Funds 1,175,000.00 2,072,000.00 3,247,000.00 3,255,256.00 (8,256.00) Total Current Assets (1,606,459.75) 20,274,221.90 18,667,762.15 23,924,350.95 (5,256,588.80) Receivables Accounts (net of uncollectible allowances) 2,210,021.43 1,274,907.33 3,484,928.76 3,045,286.44 439,642.32 Interest 49,785.32 49,785.33 99,570.65 148,628.57 (49,057.92) Total Receivables 2,259,806.75 1,324,692.66 3,584,499.41 3,193,915.01 390,584.40 Other Assets Inventory 2,331,448.77 511,198.87 2,842,647.64 2,639,624.88 203,022.76 Prepaid Expenses 246,675.07 97,175.75 343,850.82 491,735.60 (147,884.78) Sales Tax Receivable 131,912.57 - 131,912.57 407,634.89 (275,722.32) Deferred Outflows- Electric 371,991.00 - 371,991.00 342,759.00 29,232.00 Deferred Outflows - Gas - 123,997.00 123,997.00 114,253.00 9,744.00 Total Other Assets 3,082,027.41 732,371.62 3,814,399.03 3,996,007.37 (181,608.34) Total Current Assets 3,735,374.41 22,331,286.18 26,066,660.59 31,114,273.33 (5,047,612.74) Capital Assets Land & Land Rights 690,368.40 3,899,918.60 4,590,287.00 4,590,287.00 - Depreciable Capital Assets 95,282,874.36 45,149,321.56 140,432,195.92 139,370,395.65 1,061,800.27 Accumulated Depreciation (51,819,871.36) (23,679,017.53) (75,498,888.89) (71,539,664.53) (3,959,224.36) Construction - Work in Progress 10,698,298.07 20,868.73 10,719,166.80 2,768,524.96 7,950,641.84 Total Net Capital Assets 54,851,669.47 25,391,091.36 80,242,760.83 75,189,543.08 5,053,217.75 Total Assets 58,587,043.88 47,722,377.54 106,309,421.42 106,303,816.41 5,605.01 Current Liabilities Current Portion of Long-term Debt Bonds Payable Bond Premium Lease Liability - Solar Array Accounts Payable Accrued Expenses Accrued Interest Accrued Payroll Total Current Liabilities Long -Term Liabilities Noncurrent Portion of Long-term Debt 2017 Bonds 2012 Bonds Bond Premium 2012 Pension Liability- Electric Pension Liability - Electric OPEB Pension Liability - Nat Gas Pension Liability - Nat Gas OPEB Accrued Vacation Payable Accrued Severance Deferred Outflows - Electric Deferred Outflows - Nat Gas Total Long -Term Liabilities Net Position Retained Earnings Total Net Position HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED MARCH 31, 2026 Electric Gas Total Division Division 2026 820,000.00 19, 546.00 2,332,754.16 120, 552.12 87,987.24 3,380,839.52 10,930,000.00 390,331.20 1, 585, 328.00 42,211.00 635,863.89 224,153.38 1,087,158.00 14,895,045.47 2,080,000.00 185,608.32 989,307.67 34,666.60 32,545.81 3,322,128.40 (61,869.81) 528,443.00 14,071.00 224,492.28 44,404.41 362,386.00 1,111,926.88 2,900,000.00 185,608.32 19, 546.00 3,322,061.83 155,218.72 120,533.05 6,702,967.92 10,930,000.00 328,461.39 1, 585, 328.00 42,211.00 528,443.00 14,071.00 860,356.17 268,557.79 1,087,158.00 362,386.00 16,006,972.35 Total Net Change 2025 Total (YTD) 2, 770, 000.00 130, 000.00 185,608.32 - - 19,546.00 3,266,676.00 55,385.83 198,752.07 (43,533.35) 99,269.08 21,263.97 6, 520, 305.47 182, 662.45 11,750,000.00 (820,000.00) 2,080,000.00 (2,080,000.00) 547,526.67 (219,065.28) 1,832,248.00 (246,920.00) 39,880.00 2,331.00 610,749.00 (82,306.00) 13,293.00 778.00 739,330.02 121,026.15 245,721.73 22,836.06 1,294,449.00 (207,291.00) 431,483.00 (69,097.00) 19,584,680.42 (3,577,708.07) 40,311,158.89 43,288,322.26 83,599,481.15 80,198,830.52 3,400,650.63 40,311,158.89 43,288,322.26 83,599,481.15 80,198,830.52 3,400,650.63 Total Liabilities and Net Position 58,587,043.88 47,722,377.54 106,309,421.42 106,303,816.41 5,605.01 Hutchinson Utilities Commission Cash -Designations Report, Combined 3/31/2026 Financial Institution Current Interest Rate Annual Interest Balance, March 2026 Balance, February 2026 Change in Cash/Reserve Position Savings, Checking, Investments varies varies varies 18,667,762.15 18,711,058.96 (43,296.81) Total Operating Funds 18,667,762.15 18,711,058.96 (43,296.81) Debt Reserve Requirements Bond Covenants - sinking fund Debt Reserve Requirements Bond Covenants -1 year Max. P & I Total Restricted Funds Operating Reserve Rate Stabalization Funds PILOT Funds Catastrophic Funds Capital Reserves Total Designated Funds Min 60 days of 2026 Operating Bud. Charter (Formula Only) Risk Mitigation Amount 5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance) 1,121,885.44 841,414.08 280,471.36 3,247,000.00 3,247,000.00 - 4,368,885.44 4,088,414.08 280,471.36 7,079,514.50 7,079,514.50 - 1,621,415.37 1,589,118.96 32,296.41 1,942,626.00 1,942,626.00 - 1, 000, 000.00 1, 000, 000.00 3,450,000.00 3,450,000.00 - 15,093,555.87 15,061,259.46 32,296.41 YE YE YE YE YTD HUC 2022 2023 2024 2025 2026 Target Debt to Asset 31.4% 28.6% 26.0% 22.3% 21.4% Current Ratio 4.47 4.48 3.67 3.10 3.17 RONA -1.38% 1.96% 2.63% 3.23% 0.77% Historical Change in Cash Balance Month End Electric Elec. Change Natural Gas Gas Change Total Total Change 3/31/2026 (1,606,460) 20,274,222 18,667,762 12/31/2025 (416,323) (1,190,137) 18,975,091 1,299,131 18,558,768 108,994 12/31/2024 6,134,710 (6,551,033) 17,717,453 1,257,638 23,852,164 (5,293,396) 12/31/2023 12,158,338 (6,023,628) 15,622,242 2,095,211 27,780,580 (3,928,416) 12/31/2022 11,633,212 525,126 15,450,554 171,688 27,083,766 696,815 12/31/2021 12,870,253 (1,237,041) 15,086,000 364,554 27,956,253 (872,487) 12/31/2020 14,239,233 (1,368,981) 15,019,173 66,827 29,258,406 (1,302,153) 12/31/2019 12,124,142 2,115,092 13,837,040 1,182,133 25,961,181 3,297,225 12/31/2018 15,559,867 (3,435,725) 12,335,998 1,501,042 27,895,864 (1,934,683) 12/31/2017 23,213,245 (7,653,378) 10,702,689 1,633,309 33,915,934 (6,020,070) 12/31/2016 8,612,801 14,600,444 9,500,074 1,202,615 18,112,875 15,803,059 12/31/2015 6,170,790 2,442,011 9,037,373 462,701 15,208,163 2,904,712 12/31/2014 3,598,821 2,571,969 6,765,165 2,272,208 10,363,986 4,844,177 * 2017's Significant increase in cash balance is due to issuing bonds for the generator project. Hutchinson Utilities Commission Cash -Designations Report, Electric 3/31/2026 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest March 2026 February 2026 Position �' Rr Savings, Checking, Investments varies varies varies 18,667,762.15 18,711,058.96 (43,296.81) Total HUC Operating Funds 18,667,762.15 18,711,058.96 (43,296.81) Debt Restricted Requirements Debt Restricted Requirements Total Restricted Funds Bond Covenants - sinking fund Bond Covenants -1 year Max. P & 1 393,885.44 1,175,000.00 1,568,885.44 295,414.08 1,175,000.00 1,470,414.08 98,471.36 - 98,471.36 Excess Reserves Less Restrictions, Electric (3,175,345.19) (2,687,074.07) (488,271.12) J11J! !!1 1 !1 J Operating Reserve Min 60 days of 2026 Operating Bud. 5,068,639.83 5,068,639.83 Rate Stabalization Funds $400K-$1.2K 1,301,838.58 1,301,838.58 PILOT Funds Charter (Formula Only) 1,345,802.00 1,345,802.00 Catastrophic Funds Risk Mitigation Amount 800,000.00 800,000.00 Capital Reserves 5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance) 2,750,000.00 2,750,000.00 Total Designated Funds 11,266,280.41 11,266,280.41 Excess Reserves Less Restrictions & Designations, Electric (14,441,625.60) (13,953,354.48) (488,271.12) YE YE YE YE YTD APPA Ratio HUC 2022 2023 2024 2025 2026 5K-10K Cust. Target Debt to Asset Ratio (* w/Gen.) 34.8% 34.0% 33.9% 31.6% 31.2% 39.8% pp ppppp ryry NNNNNNNNNNNN Current Ratio 4.96 4.35 2.38 0.80 0.53 3.75 >2.0 RONA -4.2% -0.9% -2.1% 0.4% -0.8% NA >0% Hutchinson Utilities Commission Cash -Designations Report, Gas 3/31/2026 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest March 2026 February 2026 Position 51' Rr Savings, Checking, Investments varies varies varies 18,667,762.15 18,711,058.96 (43,296.81) Total HUC Operating Funds 18,667,762.15 18,711,058.96 (43,296.81) Debt Restricted Requirements Bond Covenants - sinking fund 728,000.00 546,000.00 182,000.00 Debt Restricted Requirements Bond Covenants -1 year Max. P & 1 2,072,000.00 2,072,000.00 - Total Restricted Funds 2,800,000.00 2,618,000.00 182,000.00 Excess Reserves Less Restrictions, Gas 17,474,221.90 17,309,718.95 164,502.95 1 1 JJJ1 111 1 11 J J Operating Reserve Min 60 days of 2026 Operating Bud. 2,010,874.67 2,010,874.67 - Rate Stabalization Funds $200K-$600K 319,576.79 287,280.38 32,296.41 PILOT Funds Charter (Formula Only) 596,824.00 596,824.00 - Catastrophic Funds Risk Mitigation Amount 200,000.00 200,000.00 Capital Reserves 5 Year CIP (2026-2030 Fleet & Infrastructure Maintenance) 700,000.00 700,000.00 - Total Designated Funds 3,827,275.46 3,794,979.05 32,296.41 YE YE YE YE YTD HUC 2022 2023 2024 2025 2026 AGA Ratio Target Debt to Asset 26.5% 21.0% 15.5% 10.6% 9.3% 35%-50% Current Ratio 4.06 4.61 5.08 5.18 5.84 1.0-3.0 RONA 3.0% 6.2% 9.1% 7% 2.8% 2%-5% Notes/Graphs: ELECTRIC DIVISION Operating Revenue March 2026 CLASS AMOUNT KWH /KWH Street Lights 28,464.62 415 $68.5894 Electric Residential Service $497,789.18 3,942,320 $0.1263 All Electric Residential Service $27,189.08 233,288 $0.1165 Electric Small General Service $168,254.34 1,406,491 $0.1196 Electric Large General Service $748,704.15 7,734,800 $0.0968 Electric Large Industrial Service $669,302.75 7,975,000 $0.0839 Total $2,139,704.12 21,292,314 $0.1005 Power Adjustment $0.00754 Rate Without Power Adjustment $0.09296 Electric Division Year -to -Date ® 2026 $ Amount ❑ 2025 $ Amount ® 2026 KWH110 ❑ 2025 KWH110 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Residential All Elec. Resid. Small Gen. Srv. Large Gen. Srv. Large Industrial Sales For Resale Total NOTE: This graph includes sales for resale (capacity and energy sales) but excludes street lights and security lights NATURAL GAS DIVISION Operating Revenue March 2026 CLASS AMOUNT MCF /MCF Residential $462,122.08 48,577 $9.5132 Commercial $323,080.94 35,277 $9.1585 Large Industrial $33,978.36 3,908 $8.6939 Large Industrial Contracts $520,624.07 77,722 $6.6985 Total $1,339,805.45 165,484 $8.0963 Fuel Adjustment $0.00037 Rate Without Fuel Adjustment $8.09592 Natural Gas Division Year -to -Date ❑ 2026 $ Amount ❑ 2025 $ Amount m 2026 MCF ❑ 2025 MCF 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Gas Residential Gas Commercial Large Industrial Large Industrial Total Contracts 2 0 y N y o Z a O O N- Z Z Z Z Z Z Z Z Z Z M W (O (O N Q O Coco 0 C1 C1 V O i N W O N V C1 O W V W V C1 N N O O O C1 C1 V' O N O O N W O N O C O O O O W N W N N W M O N N W C V' M C1 W N I� C1 W N W C1 O O W M u O O O N N M 0 0 0 0 0 0 0 O O O N O O 0 0 0 0 0 0 0� O O O W N W W V N .. 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L cc mcc LU W U) 0 U Q U) 0 2 — (sa4nuiW) laws d d d d d d (suogdnaaa4ui p jacllwnu) IAIaS O U I cu U 0) cu O cu E �L n D O U U) LU U) D Q U LU C9 H D O Q a \ C \ a O -1.1 cu L I cu U 0) cu O L, cu E �L L.L z O F- 9 D w U) D U LU C9 H D O Q a 0 cz_ NCN Lf� O LNNL Ix W a cn Ix O 0 z Y z D U U O U (D 0) cu O N cu $ o + U) \ cc � D C § c % 0 R f' £ f cn m o � 2 G k m k / 2 k �.0 E / 5 CL � § E o 2 — M o U / § k n § § � a � a �§ a 2 2 2 m m m @ E 2 2 m /U _ c 2 2 2 E 0 cu Cl) p ) E 0 k 0 QL Cl) F / co 0 � k E 2 _ E — — � \ k / � (D O E O E O b § CU O O � / 0 Cl) Cl) \ cu U U q / § k cu 0 A $ A $ A C) k % k % k / 0 o § ± ± ± A co f & £ c § k 0 kCL 0 a k E u E @ 2 � k k & � @ � > HUTCHINSON UTILITIES COMMISSION Board Action Form �rre tit' Agenda Item: Review Policies Presenter: Angie Radke Agenda Item Type: Time Requested (Minutes): 5 Review Policies Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. This month, the following policies were reviewed and no changes are recommended on these policies at this time: i. Section 4 of Exempt Handbook ii. Section 4 of Non -Exempt Handbook BOARD ACTION REQUESTED: None Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: EXEMPT SECTION 4 — WAGE AND SALARY INFORMATION PAY PERIOD, PAYDAYS All employees are paid every other Thursday for the two -week period ending the preceding Sunday at 12:00 midnight. Should a payday fall on a holiday, paychecks/direct deposits will be available the preceding day. PAYROLL DEDUCTIONS HUC is required to deduct federal and state income taxes, Social Security tax, and any court - ordered deductions such as child support from paychecks/direct deposits. HUC is also required to deduct the employee's contribution to the Public Employee Retirement Association (PERA). Other deductions may be made from a paycheck/direct deposit such as deferred compensation, and insurance premiums. These payroll deductions may be made only with the employee's written consent. OVERTIME Exempt employees may earn compensatory time on an hour -for -hour basis for all hours worked in excess of 40 hours per week. Exempt employees must use their compensatory time by December 31 of the year in which it is earned or it will be forfeited. Accrued compensatory time shall not be paid out to exempt employees upon separation from employment. COMPENSATION PLAN The Hutchinson Utilities Commission (HUC) has considered the existing positions for HUC and the current economic conditions. For each position there shall be a title, job description, and a pay scale level assigned. This plan covers all regular full-time, exempt positions/employees only. Plan Objectives To establish and maintain a compensation plan that enables HUC to be highly competitive within our defined industry. To lead or exceed the market in attracting and retaining qualified, reliable and motivated employees who are committed to quality and excellence for those we serve. To ensure, subject to the financial condition of HUC, that employees receive fair and equitable compensation in relation to their individual contributions to HUC's success. To follow the principles of pay equity in establishing and maintaining pay relationships among positions. To ensure program flexibility necessary to meet changing economic, competitive, technological, and regulatory conditions encountered by HUC. To balance compensation and benefit needs with available resources. Open Salary Range HUC shall adopt an Open Salary Range compensation plan that will allow for maximum flexibility since there are not defined or pre -calculated "steps". Employee movement is based solely on performance. The open salary range concept rewards good and exceptional performers and advances employees to the market rate more quickly. Allocation of New Positions When a new position is created for which no appropriate description exists or when the duties of an existing position are sufficiently changed so that no appropriate description exists, the Commission, after recommendation of the General Manager/HR, shall cause an appropriate job description -specification to be written for said position. Pay Scales Pay scales will be adjusted on an annual basis in accordance with adjustments made in the labor agreement. Exempt Employees Each position will have a six-month probationary period. After satisfactory completion of the probationary period, an increase may be granted as warranted by the annual performance appraisal. Thereafter, consideration for increases will be given annually at the first of the year. The General Manager reserves the discretion to adjust individual rates as required. The Commission will determine any pay increase for the General Manager. Consideration for market adjustment will be made each January 1. The General Manager shall maintain the discretion to hire at any point based on the qualifications, experience, market conditions or other relevant factors, to secure the best candidate for the position. Performance Evaluations For all regular full-time employees, a performance appraisal or evaluation will be made on an annual basis. An evaluation made by the employee's manager or supervisor shall be submitted in writing to the employee and the General Manager. All evaluations will be forwarded to the Human Resources for filing in the employee files. Evaluations shall be based upon the performance of the individual in the position measured against established job performance criteria. Such criteria may include level of knowledge, skills, ability, quality of work, personal work traits, compliance with established HUC or departmental rules and regulations or any other criteria that is indicative of performance. The performance appraisal process is the application of performance standards to past performance. In appraising an employee, these are the basic levels of performance: 5 — Outstanding Performer — Performance is exceptional in all areas and is recognizable as being far superior to others. 4 — Exceeds Expectations — Results clearly exceed most positions requirements. Performance is of high quality and is achieved on a consistent basis. 3 — Solid Performer — Competent and dependable level of performance. Meets performance standards of the job. 2 — Needs Improvement — Performance is deficient in certain area(s). Improvement is necessary. 1— Unsatisfactory — Results are generally unacceptable and require immediate improvement. Results - The results of the exempt employee's evaluation will normally have the following effect on his/her salary per the following Merit Increase Guide below. The percent increase given to an employee within a certain performance score range will be based on where the employee's current salary is at in their respective pay grade range approved by the Commission Performance Score: 0 to 1.0 1.01 to 2.0 2.01 to 3.0 3.01 to 4.0 4.01 to 5.0 % of Increase Range 0% - 0% 0% - 2% 1% - 5% 2% - 6% 3% - 7% Market Conditions Notwithstanding any language to the contrary, HUC retains the right to deviate from the pay plan when, in the sole judgment of the Commission, market conditions or other circumstances dictate such a decision. Market conditions are defined as the availability of a particular position. Eligible employees include all non -represented employees except those who have been subject to disciplinary action per the HUC Employee Handbook as follows: An additional consequence of disciplinary action more severe than oral reprimand will be the permanent loss of the January I market adjustment in the calendar year following such disciplinary action. This will occur unless the Manager in charge and the General Manager decide otherwise. Annual Market Adjustment Consideration On an annual basis, a market survey will be reviewed. As a result of the current year marketplace, an additional increase may be deemed necessary. The General Manager maintains final approval responsibility for salary increases. Any market adjustment on January I of any year shall be separate and apart from the individual merit increases. In determining a recommendation for an annual market adjustment, the General Manager shall consider, at least the following information: I. U.S. and Minneapolis/St. Paul consumer -priced index changes (CPIU & CPIW) 2. Social Security calculation of cost of living increase 3. Unemployment rate 4. Employee turnover rate 5. Area wage survey 6. Legislative growth factor constraints 7. Bargaining Unit Increase Modification of the Plan HUC reserves the right to modify any or all of the components or to vary from any of the components of the Compensation Plan at its discretion and at any time. Review of the Plan It is recommended that HUC's General Manager/HR annual review and maintain its Position Classification Plan. As deemed necessary, the General Manager/HR would recommend any changes to the Commission. It is further recommended that a comprehensive review be completed every five years. TRAVEL EXPENSES Business Related Vehicle Operation Travel within the State shall be by HUC vehicle if possible. If a HUC vehicle is not available for in -State travel, or is not practical to use, then an employee may seek approval from Manager to use a personal vehicle for transportation. The following rules shall apply: • The employee shall be reimbursed for mileage at the current IRS mileage reimbursement rate. • HUC is not liable for damage to personally owned vehicles used for HUC business. • HUC may request proof of insurance from employees who use personally owned vehicles on HUC business. • Travel to and from events should be by the most direct route possible. • Employees are expected to return in a timely manner. Travel outside of the State must be approved by the employee's Manager. If it is appropriate to drive, the employee shall follow the same rules as travel within the State. Whether a HUC vehicle, or a personal vehicle is used, the employee is responsible for any traffic or parking citations the employee receives while operating such vehicle on HUC business. Employees who drive a HUC vehicle home may use the vehicle only for HUC business purposes. Employees who are members of the Hutchinson Fire Department or Rescue Squad may use a HUC vehicle to travel to the fire station to respond to a call when the firefighter or rescue squad member is on the job with HUC at the time of the call_ If the firefighter or rescue squad member is at HUC, they must use a personal vehicle to respond to the call. Air Travel and Rental Vehicles It is recognized that air travel may be a necessary part of conducting business for HUC. In the circumstances of air travel, the following rules shall apply: • Commercial carriers shall be used. • Tickets should be at "standard" or "coach" class. • Travel to and from the airports shall follow the Business Related Vehicle Operation section. • Travel outside of the State must be approved by the employee's Manager. • Only employee's air travel expenses shall be prepaid, charged, or reimbursed at cost. Rental vehicles may be used when traveling outside of the State. Reservations of a rental vehicle shall be made at the same time air travel is arranged. Renting a vehicle must be approved by the employee's Manager. Overnight Stays, Meals and Entertainment Expenses Hotel reservations shall be made prior to the employee leaving for out of town travel. The following items shall apply to overnight stays: • Hotel accommodations for the employee must be approved by the employee's Manager. • In the event the employee is traveling on HUC business and experiences inclement weather, to the extent that it is not safe to travel, or the employee is not able to travel due to some circumstance that is beyond their control, then no prior approval for hotel accommodations are necessary. • Hotel rooms at convention or seminar sites are approved accommodations. • Reimbursement is limited to employees and business related guests, and must be directly related to business. The following shall apply to expenses associated with meals: • Meals shall be limited to a maximum of United States General Services Administration Per Diam Rates by location. This rate is a maximum and not an allowance. • Meal gratuity reimbursement by HUC shall not exceed 20% of the bill and is included in the daily maximum meal allowance. • Meal reimbursement is limited to employees. • Expenses associated with alcoholic beverages shall not be reimbursed. Expense Report An expense report shall be filled out for all reimbursement requests for purchases using personal funds. Unsupported expenses using personal funds shall not be reimbursed by HUC. An expense report shall also be filled out for all company travel purchases. Unsupported expenses on an HUC credit card shall be reimbursed to HUC by the employee. The expense report must state the type of expense (meal, travel, hotel, etc.), the date and the business purpose. Alcohol is not a reimbursable expense. It is the employee's responsibility to obtain an itemized receipt. The expense report shall be approved by your Manager, or Supervisor before submitting to the Financial Manager. WORKER'S COMPENSATION An employee who is injured on the job or becomes ill due to job -related reasons is eligible for worker's compensation benefits. HUC's worker's compensation insurance provider shall pay the employee approximately 2/3 of the weekly gross wage or salary lost due to injury or illness and HUC shall pay the additional 1/3 of the weekly gross wage for up to 120 work days. Thereafter, the employee may use accrued sick leave, vacation leave, or compensatory time to pay the additional 1/3 lost wage or salary. PERA and FICA are not deducted from the worker's compensation portion of the paycheck. NON-EXEMPT SECTION 4 — WAGE AND SALARY INFORMATION PAY PERIOD, PAYDAYS All employees are paid every other Thursday for the two -week period ending the preceding Sunday at 12:00 midnight. Should a payday fall on a holiday, paychecks/direct deposits will be available the preceding day. PAYROLL DEDUCTIONS HUC is required to deduct federal and state income taxes, Social Security tax, and any court - ordered deductions such as child support from paychecks/direct deposits. HUC is also required to deduct the employee's contribution to the Public Employee Retirement Association (PERA). Other deductions may be made from a paycheck/direct deposit such as union dues, deferred compensation, and insurance premiums. These payroll deductions may be made only with the employee's written consent. OVERTIME See Union Contract. COMPENSATION PLAN Performance Evaluations For all regular full-time employees, a performance appraisal or evaluation will be made on an annual basis. An evaluation made by the employee's manager, or supervisor will be submitted in writing to the employee and the General Manager. All evaluations will be forwarded to the Human Resources for filing in the employee files. Evaluations shall be based upon the performance of the individual in the position measured against established job performance criteria. Such criteria may include level of knowledge, skills, ability, quality of work, personal work traits, compliance with established HUC or departmental rules and regulations or any other criteria that is indicative of performance. The performance appraisal process is the application of performance standards to past performance. In appraising an employee, these are the basic levels of performance: 5 — Outstanding Performer— Performance is exceptional in all areas and is recognizable as being far superior to others. 4 — Exceeds Expectations — Results clearly exceed most positions requirements. Performance is of high quality and is achieved on a consistent basis. 3 — Solid Performer — Competent and dependable level of performance. Meets performance standards of the job. 2 — Needs Improvement — Performance is deficient in certain area(s). Improvement is necessary. 1— Unsatisfactory — Results are generally unacceptable and require immediate improvement. TRAVEL EXPENSES Business Related Vehicle Operation Travel within the State shall be by HUC vehicle if possible. If a HUC vehicle is not available for in -State travel, or is not practical to use, then an employee may seek approval from Manager to use a personal vehicle for transportation. The following rules shall apply: • The employee will be reimbursed for mileage at the current IRS mileage reimbursement rate. • HUC is not liable for damage to personally owned vehicles used for HUC business. • HUC may request proof of insurance from employees who use personally owned vehicles on HUC business. • Travel to and from events should be by the most direct route possible. • Employees are expected to return in a timely manner. Travel outside of the State must be approved by the employee's Manager. If it is appropriate to drive, the employee shall follow the same rules as travel within the State. Whether a HUC vehicle, or a personal vehicle is used, the employee is responsible for any traffic or parking citations the employee receives while operating such vehicle on HUC business. Employees who drive a HUC vehicle home may use the vehicle only for HUC business purposes. Employees who are members of the Hutchinson Fire Department or Rescue Squad may use a HUC vehicle to travel to the fire station to respond to a call when the firefighter or rescue squad member is on the job with HUC at the time of the call_ If the firefighter or rescue squad member is at HUC, they must use a personal vehicle to respond to the call. Air Travel and Rental Vehicles It is recognized that air travel may be a necessary part of conducting business for HUC. In the circumstances of air travel, the following rules shall apply: • Commercial carriers shall be used. • Tickets should be at "standard" or "coach" class. • Travel to and from the airports shall follow the Business Related Vehicle Operation section. • Travel outside of the State must be approved by the employee's Manager. • Only employee's air travel expenses will be prepaid, charged, or reimbursed at cost. Rental vehicles may be used when traveling outside of the State. Reservations of a rental vehicle shall be made at the same time air travel is arranged. Renting a vehicle must be approved by the employee's Manager. Overnight Stays and Meals Hotel reservations shall be made prior to the employee leaving for out of town travel. The following items shall apply to overnight stays: • Hotel accommodations for the employee must be approved by the employee's Manager. • In the event the employee is traveling on HUC business and experiences inclement weather, to the extent that it is not safe to travel, or the employee is not able to travel due to some circumstance that is beyond their control, then no prior approval for hotel accommodations are necessary. • Hotel rooms at convention or seminar sites are approved accommodations. • Reimbursement is limited to employees and business related guests, and must be directly related to business. The following shall apply to expenses associated with meals: • Meals shall be limited to a maximum of United States General Services Administration Per Diam Rates by location. This rate is a maximum and not an allowance. • Meal gratuity reimbursement by HUC shall not exceed 20% of the bill and is included in the daily maximum meal allowance. • Meal reimbursement is limited to employees. • Expenses associated with alcoholic beverages will not be reimbursed. Expense Report An expense report shall be filled out for all reimbursement requests for purchases using personal funds. Unsupported expenses using personal funds will not be reimbursed by HUC. An expense report shall also be filled out for all company travel purchases. Unsupported expenses on an HUC credit card shall be reimbursed to HUC by the employee. The expense report must state the type of expense (meal, travel, hotel, etc.), the date and the business purpose. Alcohol is not a reimbursable expense. It is the employee's responsibility to obtain an itemized receipt. The expense report shall be approved by your Manager, or Supervisor before submitting to the Financial Manager. WORKER'S COMPENSATION An employee who is injured on the job or becomes ill due to job -related reasons is eligible for worker's compensation benefits. WC's worker's compensation insurance provider will pay the employee approximately 2/3 of the weekly gross wage or salary lost due to injury or illness and HUC shall pay the additional 1/3 of the weekly gross wage for up to 120 work days. Thereafter, the employee may use accrued sick leave, vacation leave, or compensatory time to pay the additional 1/3 lost wage or salary. PERA and FICA are not deducted from the worker's compensation portion of the paycheck. HUTCHINSON UTILITIES COMMISSION ^I'xP61Tti'°" Board Action Form Agenda Item: Approval of Highland Parks NG Transportation and Commodity Supply Agreement Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Highland Park currently transports base load and daily swing supplies of natural gas on Hutchinson Utilities' transmission and distribution systems. Highland Park's current agreement expires on May 1, 2026 at 9 A.M.. This contract renewal agreement provides transportation rights to Highland Park on Hutchinson's facilities and terms of purchasing commodities from May 1, 2026 at 9:00 A.M., through March 1, 2027 at 9:OOA.M.. See amended changes to the new agreement below: 1. The new contract runs 10 months versus 12 months. This change is strictly to place both of Hutchinson's retail transport customers on the same contract cycle for ease of administration. 2. All prepay language pertaining to a 4 cent discount on half the base -load has be removed as that agreement is no longer in place. 3. The meter price has changed to reflect the last rate increase approved by the commission. BOARD ACTION REQUESTED: Approval of the Highland Park's NG Transportation and Commodity Supply Agreement Fiscal Impact: Approx. $65,500 Included in current budget: Yes Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: HUTCHINSON UTILITIES COMMISSION 225 MICHIGAN STREET HUTCHINSON MINNESOTA 55350 NATURAL GAS TRANSPORTATION AND COMMODITY PURCHASE AGREEMENT THIS AGREEMENT ("AGREEMENT") IS MADE AND ENTERED INTO THIS 29TH DAY OF APRIL., 2026, TO BE EFFECTIVE AS OF THE 1 ST DAY OF MAY, 2026, BY AND BETWEEN HIGHLAND PARK INDUSTRIAL LLC, LOCATED AT 999 1 9T" ST., SUITE 1 1 20-s, DENVER, CO, 80202 AND HUTCHINSON UTILITIES COMMISSION ("HUC") A MINNESOTA MUNICIPAL. UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA, 55350. HIGHLAND PARK INDUSTRIAL., LLC AND HUTCHINSON SHALL HEREINAFTER SOMETIMES BE REFERRED TO SEPARATELY AS "PARTY" OR JOINTLY AS "PARTIES." WHEREAS, HIGHLAND PARK INDUSTRIAL., LLC DESIRES TO PURCHASE, AND HUC SHALL PROVIDE, FIRM GAS FOR USE AT HIGHLAND PARK INDUSTRIAL., LLC/HUTCHINSON PLANT; AND, WHEREAS, HIGHLAND PARK INDUSTRIAL., LLC DESIRES TO PURCHASE, AND HUC SHALL PROVIDE, FIRM NATURAL. GAS TRANSPORTATION FOR USE AT HIGHLAND PARK INDUSTRIAL'S/HUTCHINSON PLANT; AND, WHEREAS, HIGHLAND PARK INDUSTRIAL., LLC DOES ACKNOWLEDGE THAT HUC WILL, IN RELIANCE UPON THIS AGREEMENT, ENTER INTO AN AGREEMENT TO PROVIDE FIRM GAS AND TRANSPORTATION. PAGE 1 OF 14 NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES MAKE THE FOLLOWING AGREEMENT: HUC SHALL PROVIDE, AND HIGHLAND PARK INDUSTRIAL, LLC SHALL ACCEPT, FIRM CAS AND TRANSPORTATION, COMMENCING MAY 1, 2026, AT 9:00 A.M. AND TERMINATING ON MARCH 1, 2027, AT 9:00 A.M. 1. AVAILABILITY A. GENERAL FIRM TRANSPORTATION SERVICE UNDER THIS AGREEMENT SHALL BE AVAILABLE TO HIGHLAND PARK INDUSTRIAL, LLC UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT. THIS SERVICE MAY NOT BE CURTAILED OR INTERRUPTED EXCEPT PURSUANT TO THE TERMS OF THIS AGREEMENT. B. THE COST FOR ADDITIONAL CAPACITY OR NEW INSTALLATIONS UTILIZING THIS SERVICE SHALL BE BILLED TO HIGHLAND PARK INDUSTRIAL, LLC. HIGHLAND PARK INDUSTRIAL, LLC MUST SUBMIT A WRITTEN REQUEST TO HUC FOR ADDITIONAL CAPACITY/NEW INSTALLATIONS. ALL ADDITIONAL COSTS MUST BE PRE -APPROVED, IN WRITING, BY HIGHLAND PARK INDUSTRIAL, LLC. C. COMPLIANCE WITH AGREEMENTS SERVICE UNDER THIS AGREEMENT SHALL NOT COMMENCE UNTIL BOTH PARTIES HAVE FULLY EXECUTED THIS AGREEMENT AND COMPLIED WITH ALL RELEVANT REQUIREMENTS CONTAINED HEREIN. D. AGREEMENT CHANGES HUC HAS THE RIGHT TO MODIFY THIS AGREEMENT DUE TO CHANGES IMPOSED BY HUC'S CURRENT NATURAL GAS TRANSMISSION PROVIDERS AND FEDERAL, STATE AND LOCAL REGULATORS/AUTHORITIES. 2. TERM THE TERM FOR SERVICE UNDER THIS AGREEMENT IS TEN (1 O) MONTHS. HIGHLAND PARK INDUSTRIAL, LLC MUST NOTIFY HUC IN WRITING THREE (3) MONTHS PRIOR TO THE EXPIRATION OF THE TERM IF HIGHLAND PARK INDUSTRIAL, LLC DESIRES TO CONTINUE SERVICE UNDER THIS AGREEMENT. IF HIGHLAND PARK INDUSTRIAL, LLC HAS COMPLIED WITH ALL TERMS OF THIS AGREEMENT, AND HAS NO PAGE 2 OF 14 OUTSTANDING ARREARAGES, HIGHLAND PARK INDUSTRIAL, LLC MAY, UPON WRITTEN NOTICE PROVIDED TO HUC THREE (3) MONTHS PRIOR TO THE EXPIRATION OF THE CURRENT TERM, SEEK A RENEWAL OF THIS AGREEMENT FOR AN ADDITIONAL ONE (1) YEAR. IF SUCH TIMELY NOTICE IS NOT PROVIDED BY HIGHLAND PARK INDUSTRIAL, LLC, HUC IS NOT OBLIGATED TO RENEW SERVICE FOR HIGHLAND PARK INDUSTRIAL, LLC. 3. RATES A. RATES FOR SERVICE THE FOLLOWING CHARGES SHALL APPLY TO THE FIRM COMMODITY AND TRANSPORTATION CAPACITY TO BE PROVIDED TO HIGHLAND PARK INDUSTRIAL, LLC BY HUC: 1. COMMODITY ALL FIRM BASELOAD NATURAL GAS PURCHASES UNLESS ALTERNATIVELY SPECIFIED (ARTICLE 9) SHALL BE PRICED AT THE FIRST OF THE MONTH (FOM) INDEX AS PUBLISHED IN PLATTS FERC GAS MARKET REPORT FOR NORTHERN NATURAL GAS CO. AT VENTURA, IOWA PLUS OR MINUS ANY INDEX PREMIUM OR DISCOUNT BASED ON CURRENT MARKET CONDITIONS AT THE TIME THE GAS IS PURCHASED. HUC SHALL PURCHASE HIGHLAND PARK INDUSTRIAL'S, FIRM BASE LOAD NATURAL GAS REQUIREMENTS, FOR THE FOLLOWING MONTH, WITHIN 24 BUSINESS HOURS OF RECEIPT OF HIGHLAND PARK INDUSTRIAL'S FIRST OF THE MONTH BASE LOAD NOMINATION. 2. MONTHLY DEMAND CHARGE MONTHLY DEMAND CHARGE PER - - $ 1 0.33 MCF OF BILLING DEMAND 3. TRANSPORTATION CHARGE TRANSPORTATION CHARGE, PER METERED DTH -- $ 1.00 (TRANSMISSION - $0.20/DTH) (DISTRIBUTION - $0.80/DTH) 4. MONTHLY METER CHARGE METER FEE - $536/METER PAGE 3 OF 14 5. TAXES THE ABOVE CHARGES DO NOT INCLUDE ANY TAXES. B. METERING HIGHLAND PARK INDUSTRIAL., LLC SHALL PAY ALL COSTS ASSOCIATED WITH THE INSTALLATION OF METERS AND ANY OTHER EQUIPMENT NECESSARY FOR HIGHLAND PARK INDUSTRIAL., LLC TO RECEIVE SERVICE UNDER THIS AGREEMENT UNLESS OTHERWISE AGREED TO IN WRITING BETWEEN HIGHLAND PARK INDUSTRIAL., LLC AND HUC. 4. RECONNECTION CHARGE ANY TRANSPORTATION CUSTOMER RECEIVING SERVICE PURSUANT TO THIS AGREEMENT MUST PAY THE "RECONNECTION CHARGE" AS SET FORTH WHEN REQUESTING A RETURN TO HUC'S SYSTEM SUPPLY FOR ALL OR ANY PORTION OF THE TRANSPORTATION CUSTOMER'S DAILY REQUIREMENTS. THE RECONNECTION CHARGE SHALL BE CALCULATED ON A MONTHLY BASIS AND SHALL CONSIST OF A REALIGNMENT SURCHARGE THAT APPLIES TO ALL VOLUMES MEASURED BY HIGHLAND PARK INDUSTRIAL'S INDUSTRIAL. METER. A. TERM SIX MONTHS - COMMENCING WITH THE FIRST MONTH FOLLOWING THE TERMINATION OF THIS AGREEMENT B. REALIGNMENT SURCHARGE THE REALIGNMENT SURCHARGE SHALL BE IN ADDITION TO THE INDUSTRIAL. RATE AS PUBLISHED BY HUC. THE REALIGNMENT SURCHARGE (RS) SHALL BE CALCULATED AS FOLLOWS: RS = MONTHLY INSIDE FERC VENTURA INDEX, AS PUBLISHED BY PL.ATT'S "GAS DAILY", PLUS/MINUS THE NNG VENTURA TO NBPL VENTURA MONTHLY PREMIUM MINUS HUC'S "BASE RATE" ($7.85 IN 2017). PROVIDED, HOWEVER, THAT SUCH SURCHARGE SHALL NEVER BE LESS THAN $0.00. 5. EARLY TERMINATION HIGHLAND PARK INDUSTRIAL., LLC MAY TERMINATE THIS AGREEMENT AT ANY TIME WITHOUT PENALTY. PAGE 4 OF 14 IN THE EVENT THAT HIGHLAND PARK INDUSTRIAL LLC TERMINATES THIS TRANSPORTATION AND COMMODITY PURCHASE AGREEMENT EARLY, HIGHLAND PARK INDUSTRIAL, LLC IS BOUND TO PAY ALL AMOUNTS OWED TO HUC, TRANSPORTATION AND COMMODITY, THROUGH THE END OF THE MONTH IN WHICH NATURAL GAS HAS BEEN PRE - PURCHASED BY HUC FOR HIGHLAND PARK INDUSTRIAL, LLC. (REFER TO SECTION 9 - FIRM GAS SUPPLY, SUBSECTIONS K AND 0. IN THE EVENT THAT HIGHLAND PARK INDUSTRIAL, LLC TERMINATES THIS TRANSPORTATION AND COMMODITY AGREEMENT AND RETURNS TO HUC'S SYSTEM SUPPLY THEN HIGHLAND PARK INDUSTRIAL, LLC SHALL COMPLY WITH SECTION 4 - RECONNECTION CHARGE AS STATED ABOVE. 6. BILLING AND PAYMENT A. BILLING INVOICE WILL BE RENDERED TO HIGHLAND PARK INDUSTRIAL, LLC, OR ITS AGENT, BY THE FIFTEENTH DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH SERVICE IS RENDERED BY HUC. B. PAYMENT PAYMENT IS DUE FROM HIGHLAND PARK INDUSTRIAL, LLC ON OR BEFORE THE TENTH DAY FOLLOWING THE DATE THE BILL IS ISSUED BY HUC. A LATE PAYMENT CHARGE OF ONE AND ONE- HALF PERCENT PER MONTH, OR THE LEGALLY AUTHORIZED MAXIMUM INTEREST RATE, WHICHEVER IS LOWER, SHALL BE LEVIED ON ANY UNPAID BALANCE. 7. CONDITIONS OF SERVICE A. HUC HEREBY CERTIFIES THAT IT HAS SUFFICIENT FIRM TRANSPORTATION CAPACITY TO PROVIDE THE AMOUNT OF FIRM TRANSPORTATION SERVICE TO HIGHLAND PARK INDUSTRIAL, LLC PURSUANT TO THE TERMS OF THIS AGREEMENT FOR THE TERM OF THIS AGREEMENT. B. UNLESS OTHERWISE AGREED BETWEEN HIGHLAND PARK INDUSTRIAL, LLC AND HUC, HIGHLAND PARK INDUSTRIAL, LLC WILL REIMBURSE HUC FOR THE COST OF METERING AND ANY OTHER EQUIPMENT AS REQUIRED BY HUC TO PROVIDE SERVICE TO HIGHLAND PARK INDUSTRIAL, LLC UNDER THIS AGREEMENT. ALL SUCH EQUIPMENT SHALL REMAIN THE PROPERTY OF HUC. HUC SHALL SUBMIT A WRITTEN ESTIMATE TO HIGHLAND PARK INDUSTRIAL, LLC ITEMIZING ALL COSTS ASSOCIATED WITH THE INSTALLATION OF REQUIRED METERING AND OTHER EQUIPMENT NECESSARY FOR HIGHLAND PARK INDUSTRIAL, LLC TO RECEIVE PAGE 5 OF 14 SERVICE UNDER THIS AGREEMENT. HIGHLAND PARK INDUSTRIAL LLC MUST PROVIDE WRITTEN APPROVAL, TO HUC AUTHORIZING PURCHASE OF SAID EQUIPMENT. C. UNLESS OTHERWISE AGREED TO IN WRITING BY HUC AND HIGHLAND PARK INDUSTRIAL LLC, AUTOMATIC TEL.EMETERING EQUIPMENT IS REQUIRED. HIGHLAND PARK INDUSTRIAL., LLC SHALL PROVIDE TELEPHONE, COMPUTER AND OTHER INTERFACES, AS WELL AS ELECTRIC CONNECTIONS TO THE METER(S), AS AGREED TO BY HIGHLAND PARK INDUSTRIAL., LLC AND HUC. ALL MONTHLY UTILITY FEES (TELEPHONE, ELECTRICITY, ETC.) SHALL BE BORNE BY HIGHLAND PARK INDUSTRIAL., L.L.C. HIGHLAND PARK INDUSTRIAL., LLC SHALL PROVIDE HUC WITH ACCESS SO THAT HUC MAY OPERATE AND MAINTAIN SAID EQUIPMENT. D. HUC SHALL PROVIDE HIGHLAND PARK INDUSTRIAL., LLC (OR AGENT) WITH A DAILY USAGE REPORT VIA EMAIL. FOR NOMINATION PURPOSES. 8. NOMINATIONS A. FIRST OF THE MONTH NOMINATIONS B. BY 7:00 A.M. CENTRAL. CLOCK TIME ("C.C.T."), BY THE 1 5TH DAY OF THE MONTH PRIOR TO GAS FLOW, HIGHLAND PARK INDUSTRIAL., LLC, OR ITS DESIGNATED AGENT, SHALL PROVIDE HUC A WRITTEN ESTIMATE OF HIGHLAND PARK INDUSTRIAL'S DAILY FIRM BASE LOAD LEVEL OF NATURAL. GAS REQUIRED FOR THE FOLLOWING MONTH. IN THE EVENT HUC HAS NOT RECEIVED THE BASE LOAD NOMINATION FROM HIGHLAND PARK INDUSTRIAL., LLC BY THE ABOVE DESIGNATED TIME, HUC SHALL NOMINATE THE CURRENT MONTH'S BASE LOAD LEVEL FOR THE FOLLOWING MONTH.DAILY NOMINATIONS HIGHLAND PARK INDUSTRIAL., LLC, OR ITS DESIGNATED AGENT, SHALL NOTIFY HUC OF ANY REQUESTED CHANGE TO ITS NOMINATION, IN WRITING, BY 7:00 A.M. C.C.T AT LEAST ONE (1) BUSINESS DAY PRIOR TO THE DATE OF THE REQUESTED CHANGE. HUC SHALL GRANT SUCH REQUESTS IN ITS REASONABLE DISCRETION. C. GAS DAY THE GAS DAY SHALL RUN FROM 9:00 A.M. TO 9:00 A.M. CENTRAL. STANDARD TIME. PAGE 6 OF 14 9. FIRM GAS SUPPLY WHEREAS, HIGHLAND PARK INDUSTRIAL, LLC SHALL, HAVE A CHOICE OF PRICING MECHANISMS INCLUDING BUT NOT LIMITED TO; FOM INDEX, DAILY INDEX AND FIXED PRICE FOR SUPPLY PURCHASES FROM HUTCHINSON. A. HUC SHALL PURCHASE NATURAL GAS QUANTITIES AS DIRECTED BY HIGHLAND PARK INDUSTRIAL, LLC. B. HUC WILL BE LIMITING PURCHASE TERMS FOR ALL NATURAL GAS PURCHASES FOR HIGHLAND PARK INDUSTRIAL, LLC TO A SINGLE MONTH. FUTURES CONTRACTS EXTENDING BEYOND A SINGLE MONTH WILL NOT BE ALLOWED. C. ALL NATURAL GAS PURCHASED BY HUC FOR HIGHLAND PARK INDUSTRIAL, LLC SHALL BE DELIVERED ON THE NORTHERN BORDER PIPELINE TO THE TRIMONT/TRIMONT DELIVERY POINT. D. HUC SHALL TRANSPORT ALL HIGHLAND PARK INDUSTRIAL, LLC QUANTITIES FROM THE HUC PIPELINE TRIMONT/TRIMONT RECEIPT POINT TO THE HIGHLAND PARK INDUSTRIAL, LLC/HUTCHINSON PLANT AS PER THE "FIRM GAS AND TRANSPORTATION AGREEMENT" CURRENTLY IN PLACE, AND RENEWED ANNUALLY, BETWEEN HUC AND HIGHLAND PARK INDUSTRIAL, LLC. E. HUC UPON REQUEST SHALL PROVIDE TO HIGHLAND PARK INDUSTRIAL, LLC, FOR EACH NATURAL GAS PURCHASE, A "TRANSACTION CONFIRMATION" AS PROOF THAT THE PURCHASE WAS COMPLETED. THE "TRANSACTION CONFIRMATION" SHALL PROVIDE DETAILS OF THE NATURAL GAS PURCHASE SUCH AS DELIVERY PERIOD START DATE, DELIVERY PERIOD END DATE, TOTAL QUANTITY BY DELIVERY POINT, DELIVERY POINT AND CONTRACT PRICE. F. HUC AND HIGHLAND PARK INDUSTRIAL, LLC AGREE THAT ALL NATURAL GAS PURCHASED FOR HIGHLAND PARK INDUSTRIAL, LLC SHALL REMAIN THE PROPERTY OF HUC UNTIL SOLD TO HIGHLAND PARK INDUSTRIAL, LLC ON A DAILY BASIS. ONCE THE NATURAL GAS VOLUMES HAVE BEEN METERED, BY THE HUC METERING FACILITIES, THEY BECOME THE PROPERTY OF HIGHLAND PARK INDUSTRIAL, LLC. ALL DAILY VOLUMES FOR EACH MONTH WILL BE INVOICED TO HIGHLAND PARK INDUSTRIAL, LLC, OR ITS AGENT, BY THE FIFTEENTH DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH SERVICE IS RENDERED BY HUC. PAGE 7 OF 14 G. HUC SHALL, NOT CONSUME, REDIRECT, SELL OR OTHERWISE DISPOSE OF ANY QUANTITIES OF NATURAL GAS PURCHASED FOR HIGHLAND PARK INDUSTRIAL, LLC UNLESS DIRECTED BY HIGHLAND PARK INDUSTRIAL, LLC TO DO SO, IN WRITING. H. IN THE EVENT THAT HIGHLAND PARK INDUSTRIAL, LLC NO LONGER HAS THE ABILITY TO TAKE THE CONTRACTED NATURAL GAS COMMODITY PURCHASED UNDER THIS AGREEMENT, DUE TO PLANT TEMPORARY SHUTDOWN, PERMANENT CLOSURE, ETC., HIGHLAND PARK INDUSTRIAL, LLC SHALL TURN BACK TO HUC AN AMOUNT EQUAL TO THE REMAINING CONTRACTED QUANTITY, FOR A FINANCIAL ADJUSTMENT TO BE MADE BASED ON A FORMULA EQUAL TO THE QUANTITY OF GAS TO BE TURNED BACK BY HIGHLAND PARK INDUSTRIAL, LLC, MULTIPLIED BY THE DIFFERENCE BETWEEN THE APPLICABLE CONTRACT PRICE AND THE GDD PRICE FOR THE DAY PLUS/MINUS THE NNG VENTURA TO NBPL VENTURA DAILY PREMIUM. THE GDD PRICE MEANS THE GAS DAILY NNG VENTURA INDEX FOR THE DAY OF DELIVERY FOR THE DELIVERIES TO VENTURA. I. IN THE EVENT MONTHLY QUANTITIES ARE TO BE TURNED BACK TO HUC, THE SETTLEMENT FORMULA SHALL BE EQUAL TO THE QUANTITY OF GAS TO BE TURNED BACK MULTIPLIED BY THE DIFFERENCE BETWEEN THE APPLICABLE CONTRACT PRICE AND THE INSIDE FERC FIRST OF THE MONTH NNG VENTURA INDEX PLUS/MINUS THE NNG VENTURA TO NBPL VENTURA MONTHLY PREMIUM FOR THE MONTH IN CONSIDERATION. 10. DAILY SWING SUPPLY HUC AGREES TO PROVIDE DAILY SWING SUPPLY TO HIGHLAND PARK INDUSTRIAL, LLC AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($/DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ("DAILY INDEX") PLUS/MINUS $0.01. SWING SUPPLY IS DEFINED AS SUPPLY INCREASES OR DECREASES, FROM CONTRACTED LEVELS, NOMINATED AT LEAST 24 HOURS PRIOR TO THE START OF THE GAS DAY. 1 1. REAL TIME BALANCING HUC SHALL PROVIDE HIGHLAND PARK INDUSTRIAL, LLC WITH REAL- TIME BALANCING, BASED ON THE FOLLOWING: BEST EFFORTS REAL-TIME SWING NOMINATED LESS THAN 24 HOURS PRIOR TO THE END OF THE GAS DAY ON A BEST EFFORTS BASIS, PRICED AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($/DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ("DAILY INDEX"), PLUS/MINUS $0. 1 5. PAGE 8 OF 14 12. AGENTS A. DESIGNATION OF AGENTS HIGHLAND PARK INDUSTRIAL LLC MAY DESIGNATE AN AGENT FOR NOMINATING VOLUMES FOR TRANSPORTATION ON HUC'S SYSTEM. HIGHLAND PARK INDUSTRIAL., LLC SHALL NOTIFY HUC IN WRITING AT LEAST FIFTEEN (1 5) BUSINESS DAYS PRIOR TO THE FIRST DAY OF THE MONTH IN WHICH SUCH SERVICES WILL BE UTILIZED THAT A THIRD PARTY HAS BEEN DESIGNATED AS HIGHLAND PARK INDUSTRIAL'S AGENT AND SHALL ACT AS AGENT FOR HIGHLAND PARK INDUSTRIAL., LLC FOR PURPOSES OF NOMINATIONS, BILLING, AND/OR OTHER FUNCTIONS AS SPECIFIED BY HIGHLAND PARK INDUSTRIAL., L.L.C. IF HIGHLAND PARK INDUSTRIAL., LLC UTILIZES AN AGENT FOR ANY OR ALL OF THESE PURPOSES, HIGHLAND PARK INDUSTRIAL., LLC AGREES THAT INFORMATION TO BE SUPPLIED BY HUC TO HIGHLAND PARK INDUSTRIAL., LLC MAY BE SUPPLIED ONLY TO THE AGENT AND THAT INFORMATION SUPPLIED BY THE AGENT TO HUC SHALL BE RELIED UPON BY HUC AS IF PROVIDED BY HIGHLAND PARK INDUSTRIAL., L.L.C. HUC SHALL BE HELD HARMLESS FOR ANY ERRORS BETWEEN HIGHLAND PARK INDUSTRIAL., LLC AND SAID AGENT. SUCH DESIGNATION SHALL REMAIN IN EFFECT UNTIL. HIGHLAND PARK INDUSTRIAL., LLC NOTIFIES HUC IN WRITING THAT THE PREVIOUSLY DESIGNATED AGENT IS NO LONGER ITS AGENT. B. INFORMATION REQUIRED HIGHLAND PARK INDUSTRIAL., LLC SHALL PROVIDE THE FOLLOWING INFORMATION TO HUC CONCERNING EACH AGENT USED BY HIGHLAND PARK INDUSTRIAL., LLC FOR ANY PURPOSE: 1 . NAME AND ADDRESS OF THE AGENT OR AGENTS; 2. PRIMARY AND SECONDARY CONTACT PERSONS FOR THE AGENT OR AGENTS; 3. TELEPHONE AND FACSIMILE NUMBER FOR PRIMARY AND SECONDARY CONTACT PERSONS FOR THE AGENT OR AGENTS; AND 4. TWENTY-FOUR HOUR TELEPHONE NUMBER FOR WEEKENDS AND HOLIDAYS FOR THE AGENT OR AGENTS. PAGE 9 OF 14 C. HIGHLAND PARK INDUSTRIAL, LLC TO REMAIN LIABLE HIGHLAND PARK INDUSTRIAL, LLC MAY ELECT TO HAVE ITS BILL FOR SERVICES UNDER THIS AGREEMENT SENT DIRECTLY TO ITS AGENT. HOWEVER, IF HIGHLAND PARK INDUSTRIAL, LLC SELECTS THIS OPTION, HIGHLAND PARK INDUSTRIAL, LLC REMAINS FULLY LIABLE FOR ANY BILL RENDERED BY HUC. ALL DEADLINES SET FORTH IN THIS AGREEMENT SHALL CONTINUE TO APPLY, REGARDLESS OF WHETHER HUC'S BILL IS SENT DIRECTLY TO HIGHLAND PARK INDUSTRIAL, LLC OR TO HIGHLAND PARK INDUSTRIAL'S DESIGNATED AGENT. 13. FORCE MAJEURE A. DEFINITION EITHER PARTY SHALL BE EXCUSED FROM PERFORMANCE UNDER THIS AGREEMENT BY FORCE MAJEURE ACTS AND EVENTS. "FORCE MAJEURE" SHALL MEAN ACTS AND EVENTS NOT WITHIN THE CONTROL OF THE PARTY CLAIMING FORCE MAJEURE, AND SHALL INCLUDE, BUT NOT BE LIMITED TO, ACTS OF GOD, STRIKES, LOCKOUTS, MATERIAL, EQUIPMENT, OR LABOR SHORTAGES, WARS, RIOTS, INSURRECTIONS, EPIDEMICS, LANDSLIDES, EARTHQUAKES, FLOODS, FIRES, STORMS, GOVERNMENT OR COURT ORDERS, CIVIL DISTURBANCES, EXPLOSIONS, BREAKAGE OR ACCIDENT TO MACHINERY OR PIPELINES, FREEZING OF WELLS OR PIPELINES, OR ANY OTHER CAUSE OF WHATEVER KIND, WHETHER SPECIFICALLY ENUMERATED HEREIN OR NOT, THAT IS NOT WITHIN THE CONTROL OF THE PARTY CLAIMING FORCE MAJEURE. B. EFFECT 1. IF HUC IS UNABLE TO PROVIDE SERVICE UNDER THIS AGREEMENT DUE TO A FORCE MAJEURE ACT OR EVENT, HUC'S OBLIGATION TO PROVIDE SERVICE UNDER THIS AGREEMENT SHALL BE SUSPENDED FOR THE DURATION OF THE ACT OR EVENT. HUC SHALL NOTIFY HIGHLAND PARK INDUSTRIAL, LLC OF THE FORCE MAJEURE EVENT AS SOON AS REASONABLY POSSIBLE BY ANY MEANS PRACTICABLE, INCLUDING, BUT NOT LIMITED TO, TELEPHONE OR FACSIMILE, AND SHALL CONFIRM THE DETAILS OF THE FORCE MAJEURE ACT OR EVENT IN WRITING WITHIN A REASONABLE AMOUNT OF TIME THEREAFTER. HUC SHALL WORK TO REMEDY THE FORCE MAJEURE ACT OR EVENT AS SOON AS REASONABLY POSSIBLE AND SHALL KEEP HIGHLAND PARK INDUSTRIAL, LLC APPRISED OF THE TIME, DATE, AND CIRCUMSTANCES WHEN SERVICE UNDER THIS AGREEMENT SHALL BE RESTORED. HIGHLAND PARK INDUSTRIAL, LLC IS NOT PAGE 10 OF 14 REQUIRED TO PAY ANY CHARGES UNDER THIS AGREEMENT DURING THE TERM OF THE FORCE MAJEURE ACT OR EVENT. 2. IF HIGHLAND PARK INDUSTRIAL LLC IS UNABLE TO TAKE SERVICE UNDER THIS AGREEMENT DUE TO A FORCE MAJEURE ACT OR EVENT, HUC'S OBLIGATION TO PROVIDE SERVICE UNDER THIS AGREEMENT SHALL BE SUSPENDED FOR THE DURATION OF THE ACT OR EVENT. HIGHLAND PARK INDUSTRIAL, LLC SHALL NOTIFY HUC OF THE FORCE MAJEURE EVENT AS SOON AS REASONABLY POSSIBLE BY ANY MEANS PRACTICABLE, INCLUDING, BUT NOT LIMITED TO, TELEPHONE OR FACSIMILE, AND SHALL CONFIRM THE DETAILS OF THE FORCE MAJEURE ACT OR EVENT IN WRITING WITHIN A REASONABLE AMOUNT OF TIME THEREAFTER. HIGHLAND PARK INDUSTRIAL, LLC SHALL WORK TO REMEDY THE FORCE MAJEURE ACT OR EVENT AS SOON AS REASONABLY POSSIBLE AND SHALL KEEP HUC APPRISED OF THE TIME, DATE, AND CIRCUMSTANCES WHEN HIGHLAND PARK INDUSTRIAL, LLC WILL RESUME SERVICE UNDER THIS AGREEMENT. HUC IS NOT REQUIRED TO PROVIDE SERVICE UNDER THIS AGREEMENT DURING THE TERM OF THE FORCE MAJEURE ACT OR EVENT. 14. LAWS, REGULATIONS, AND ORDERS SERVICE UNDER THIS AGREEMENT IS SUBJECT TO ALL PRESENT AND FUTURE VALID LAWS, ORDERS, RULES, REGULATIONS, ETC., ISSUED BY ANY FEDERAL, STATE, OR LOCAL AUTHORITY HAVING JURISDICTION OVER THE MATTERS SET FORTH HEREIN. 15. MISCELLANEOUS PROVISIONS A. DECLARATION OF INVALIDITY IF ANY PROVISION OF THIS AGREEMENT IS DETERMINED TO BE INVALID, VOID, OR UNENFORCEABLE BY ANY COURT OR OTHER ENTITY HAVING JURISDICTION, SUCH DETERMINATION SHALL NOT INVALIDATE, VOID, OR MAKE UNENFORCEABLE ANY OTHER PROVISION, AGREEMENT OR COVENANT OF THIS AGREEMENT; AND THE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH A REPLACEMENT TO SUCH INVALID, VOID OR UNENFORCEABLE PROVISION AND/OR ANY OTHER AMENDMENTS AS MAY BE NECESSARY TO ENSURE THAT THE AGREEMENT AS A WHOLE REFLECTS THE ORIGINAL INTENTIONS OF THE PARTIES. B. NO CONTINUING WAIVER NO WAIVER OF ANY BREACH OF THIS AGREEMENT SHALL BE HELD TO BE A WAIVER OF ANY OTHER OR SUBSEQUENT BREACH. PAGE 1 1 OF 14 C. L_IMITATION ON AGREEMENT THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT IT IS NEITHER THE PURPOSE OF THIS AGREEMENT NOR THEIR INTENT TO CREATE A PARTNERSHIP, JOINT VENTURE CONTRACT OR COMPANY, ASSOCIATION OR TRUST, FIDUCIARY RELATIONSHIP OR PARTNERSHIP BETWEEN THEM. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL HAVE ANY AUTHORITY TO ACT FOR OR ASSUME ANY OBLIGATIONS, OR RESPONSIBILITIES ON BEHALF OF, THE OTHER PARTY. D. COMPLETE AGREEMENT THIS AGREEMENT SETS FORTH ALL UNDERSTANDINGS BETWEEN THE PARTIES AS OF THE EFFECTIVE DATE HEREIN. ANY PRIOR CONTRACTS, UNDERSTANDINGS AND REPRESENTATIONS, WHETHER ORAL OR WRITTEN, RELATING TO THE MATTERS ADDRESSED IN THIS AGREEMENT ARE MERGED INTO AND SUPERSEDED BY THIS AGREEMENT. THIS AGREEMENT MAY BE AMENDED ONLY BY A WRITING EXECUTED BY BOTH PARTIES. E. GOVERNING LAW THE INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF MINNESOTA, EXCLUDING, HOWEVER, ANY CONFLICT OF LAW THAT WOULD APPLY THE LAW OF ANOTHER JURISDICTION. F. CONFIDENTIALITY REQUIRED NEITHER PARTY SHALL DISCLOSE DIRECTLY OR INDIRECTLY WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY THE TERMS OF THIS AGREEMENT TO A THIRD PARTY, EXCLUDING HIGHLAND PARK INDUSTRIAL'S AGENT, EXCEPT (I) IN ORDER TO COMPLY WITH ANY APPLICABLE LAW, LEGAL PROCESS, ORDER, REGULATION, OR EXCHANGE RULE; (II) TO THE EXTENT NECESSARY FOR THE ENFORCEMENT OF THIS AGREEMENT; AND (III) TO THE EXTENT NECESSARY TO IMPLEMENT AND PERFORM THIS AGREEMENT. EACH PARTY SHALL NOTIFY THE OTHER PARTY OF ANY DEMAND OR PROCEEDING OF WHICH IT IS AWARE WHICH MAY RESULT IN DISCLOSURE OF THE TERMS OF THIS AGREEMENT (OTHER THAN AS PERMITTED HEREUNDER) AND USE REASONABLE EFFORTS TO PREVENT OR LIMIT THE DISCLOSURE. THE PARTIES SHALL BE ENTITLED TO ALL REMEDIES AVAILABLE AT LAW OR IN EQUITY TO ENFORCE OR SEEK RELIEF IN CONNECTION WITH THIS CONFIDENTIALITY OBLIGATION. THE TERMS OF THIS AGREEMENT SHALL BE KEPT CONFIDENTIAL BY THE PARTIES HERETO FOR TWO YEARS FROM THE EXPIRATION OR TERMINATION OF THIS AGREEMENT. PAGE 12 of 14 IN THE EVENT THAT DISCLOSURE IS REQUIRED BY A GOVERNMENTAL. BODY OR APPLICABLE LAW, THE PARTY SUBJECT TO SUCH REQUIREMENT MAY DISCLOSE THE MATERIAL. TERMS OF THIS AGREEMENT TO THE EXTENT SO REQUIRED, BUT SHALL PROMPTLY NOTIFY THE OTHER PARTY, PRIOR TO DISCLOSURE, AND SHALL COOPERATE (CONSISTENT WITH THE DISCLOSING PARTY'S LEGAL OBLIGATIONS) WITH THE OTHER PARTY'S EFFORTS TO OBTAIN PROTECTIVE ORDERS OR SIMILAR RESTRAINTS WITH RESPECT TO SUCH DISCLOSURE AT THE EXPENSE OF THE OTHER PARTY. G. AUTHORITY TO ENTER AGREEMENT EACH PARTY TO THIS AGREEMENT REPRESENTS AND WARRANTS THAT IT HAS FULL. AND COMPLETE AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT. EACH PERSON WHO EXECUTES THIS AGREEMENT ON BEHALF OF EITHER PARTY REPRESENTS AND WARRANTS THAT IT HAS FULL. AND COMPLETE AUTHORITY TO DO SO AND THAT SUCH PARTY WILL BE BOUND THEREBY. H. THIRD -PARTY BENEFICIARIES HIGHLAND PARK INDUSTRIAL., LLC SHALL NOT TRANSFER ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT TO ANY THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF HUC. THIS AGREEMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL. OR WRITTEN AGREEMENTS SHALL BE BINDING. THIS AGREEMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES. PAGE 13 OF 14 HUTCHINSON UTILITIES COMMISSION BY: NAME: TITLE: COMMISSION PRESIDENT WITNESS: TITLE: COMMISSION SECRETARY HIGHLAND PARK INDUSTRIAL, LLC BY: NAME: Joel Stueland TITLE: Director of Construction DATE: 4/8/26 WITNESS: DATE: 4/8/26 PAGE 13 OF 13 HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: Approval of 1st Amendments to uFC's Transporation and Commodity Agreements Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: HUC has two agreements in place with United Farmers Coop (UFC). Both the transportation agreement and commodity agreement expire on 10/31/2033. During the duration of the existing contracts, UFC merged with Central Region Cooperative to form Central United Cooperative. As a result of this merger Central United Cooperative is assigned the rights and obligations under the existing contracts. The 1 st amendment to both agreements in the packet reflect the amended changes to the agreements and acknowledge the obligations placed upon the newly formed organization. BOARD ACTION REQUESTED: Approval of the 1 st Amendment to the Transportation & Commodity Agreements. Fiscal Impact: Included in current budget: Yes Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: Hutchinson Utilities Commission 1 ST AMENDMENT TO UNITED FARMERS COOPERATIVE NATURAL GAS TRANSPORTATION AGREEMENT 1. THIS AMENDMENT (THE "AMENDMENT") IS MADE AND ENTERED INTO THIS 29TH DAY OF ,A,PRj,j., 2026 BY CENTRAL UNITED COOPERATIVE WITH OFFICES LOCATED AT 705 E 4TH STREET, PO BOX 46 1, WINTHROP, MINNESOTA, 55396 AND HUTCHINSON UTILITIES COMMISSION ("HUC") A MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA, 55350. 2. THE AGREEMENT IS AMENDED AS FOLLOWS: EFFECTIVELY IMMEDIATELY CENTRAL REGION COOPERATIVE AND UNITED FARMERS COOPERATIVE HAVE MERGED TO FORM CENTRAL UNITED COOPERATIVE. AS A RESULT OF THIS MERGER CENTRAL UNITED COOPERATIVE IS ASSIGNED THE RIGHTS OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT FORMERLY ENTERED INTO WITH UNITED FARMERS COOPERATIVE ON OCTOBER 25 2023. 3. EXCEPT AS SET FORTH IN THIS AMENDMENT, THE AGREEMENT IS UNAFFECTED AND SHALL CONTINUE IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS AND CONDITIONS. IN THE EVENT THERE IS A CONFLICT BETWEEN THIS AMENDMENT AND THE AGREEMENT, THE TERMS OF THIS AMENDMENT SHALL PREVAIL. THIS AMENDMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL AMENDMENTS SHALL BE BINDING. THIS AMENDMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS W WRITING AND EXECUTED BY BOTH PARTIES. HUTCHINSON UTILITIES COMMISSION NAME: TITLE: COMMISSION PRESIDENT DATE: WITNESS: DATE: CENTRAL UNITED COOPERATIVE BY: Raoj�u, NAME: fi tfW �l (=21 e aI TITLE: DATE: WITNESS: DATE: !g Hutchinson Utilities Commission I ST AMENDMENT TO UNITED FARMERS COOPERATIVE NATURAL GAS COMMODITY AGREEMENT 1. THIS AMENDMENT (THE "AMENDMENT") IS MADE AND ENTERED INTO THIS 29TH DAY OF .APRI.L, 2026 BY CENTRAL UNITED COOPERATIVE WITH OFFICES LOCATED AT 705 E 4TH STREET, PO BOX 46 1, WINTHROP, MINNESOTA, 55396 AND HUTCHINSON UTILITIES COMMISSION ("HUC") A MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA, 55350. 2. THE AGREEMENT IS AMENDED AS FOLLOWS: EFFECTIVELY IMMEDIATELY, CENTRAL REGION COOPERATIVE AND UNITED FARMERS COOPERATIVE HAVE MERGED TO FORM CENTRAL UNITED COOPERATIVE. AS A RESULT OF THIS MERGER CENTRAL UNITED COOPERATIVE IS ASSIGNED THE RIGHTS, OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT FORMERLY ENTERED INTO WITH UNITED FARMERS COOPERATIVE ON OCTOBER 25 2023. 3. EXCEPT AS SET FORTH W THIS AMENDMENT, THE AGREEMENT IS UNAFFECTED AND SHALL CONTINUE IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS AND CONDITIONS. IN THE EVENT THERE IS A CONFLICT BETWEEN THIS AMENDMENT AND THE AGREEMENT, THE TERMS OF THIS AMENDMENT SHALL PREVAIL. THIS AMENDMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL AMENDMENTS SHALL BE BINDING. THIS AMENDMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES. HUTCHINSON UTILITIES COMMISSION NAME: TITLE: COMMISSION PRESIDENT DATE: WITNESS: DATE: CENTRAL UNITED COOPERATIVE Am.16 NAME: f %oy � G;Cfi(jt:G TITLE:y-N DATE: I -A I v5 I2(D WITNESS: DATE:/_r. HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: Approval of 1 Year Extension on Current UNG Transportation Contract Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: HUC has a transportation agreement in place with United Natural Gas. The current contract expires on May 31, 2026. UNG is currently in the process of selling its natural gas related infrastructure. In lieu of renewing a new long-term agreement, per section 3 in the existing agreement, UNG is requesting a 1 year extension of the current agreement until the acquisition is complete. Staff recommends approving the 1 year extension. Upon final acquisition of the natural gas assets, new contracts will be put in place with the new buyers of the infrastructure. BOARD ACTION REQUESTED: Approval of a 1 year extension under the current terms of the existing transportation agreement. Fiscal Impact: Included in current budget: Yes Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: Hutchinson Utilities NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT John Webster 01/20/2016 NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT THIS NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT made and entered into on this °""' ("Agreement") � is r day of January, 2016, to be effective as of the 1st day of June, 2016, by and between United Natural Gas L.L.C. ("UNG") with offices located at 705 E. 4th Street, PO Box 461, Winthrop, Minnesota, 55396 and Hutchinson Utilities Commission ("Hutchinson") a Minnesota municipal utility located at 225 Michigan St. SE, Hutchinson, Minnesota, 55350. UNG and Hutchinson shall hereinafter sometimes be referred to separately as "Party" or jointly as "Parties." Greater Minnesota Transmission L.L.C. ("GMT") acknowledges the terms and conditions set forth herein. WITNESSETH: WHEREAS, UNG desires to contract with Hutchinson for the provision of long-term firm transportation capacity by Hutchinson to UNG; WHEREAS, Hutchinson has the capability to provide UNG with long term firm transportation capacity; NOW THEREFORE, in consideration of the premises and mutual covenants and conditions contained in this Agreement, Hutchinson and UNG agree as follows: 1. Character Of Service. a. Firm Natural Gas Trans ?ortation Service -- Hutchinson shall provide to UNG firm natural gas transportation capacity in the amount of 900 Dth per day for 365 days per year, commencing on the Ist day of June, 2016, and continuing for an initial period of 10 years, through the last day of May, 2026, under the rates, terms and conditions set forth in this Agreement. This service shall always be available to UNG unless curtailed or interrupted pursuant to the terms of this Agreement. This service may not be curtailed or interrupted except pursuant to the terms of this Agreement. b. Sole Obligation To Provide Firm Transportation, Capacity° -- Hutchinson's sole obligation under this Agreement is to provide firm capacity to UNG over which UNG may transport natural gas supplies purchased from an independent 3rd party supplier. UNG Firm Transportation Capacity Agreement January 20, 2016 2. Availabilitv And Conditions. a. Generally, -- Firm transportation service under this Agreement shall be available to UNG under the terms and conditions of this Agreement. Such capacity, up to the Maximum Daily Quantity (MDQ) of 900 Dth/day, shall always be available to UNG unless such capacity is curtailed or interrupted pursuant to the terms of this Agreement. This service may not be curtailed or interrupted except pursuant to the terms of this Agreement. b. Natural Gas Standards -- Gas supplies transported by UNG under the terms of this Agreement shall meet the standards reasonably specified by Hutchinson from time to time. The gas supply standards shall be identical to the standards imposed on Hutchinson by its interstate natural gas pipeline transporter, Northern Border Pipeline Company. C. Contact Persons UNG shall supply to Hutchinson the name, business address, a primary and secondary contact person, telephone numbers for the primary and secondary contact person, and a twenty-four hour emergency telephone number. 2. Hutchinson shall supply to UNG the name, business address, a primary and secondary contact person, telephone numbers for the primary and secondary contact person, and a twenty-four hour emergency telephone number. d. Compliance With Agreement -- Service under this Agreement shall not commence until all three parties have fully executed this Agreement and complied with all relevant requirements contained herein. C. Deliver " Points -- Attachment A to this Agreement sets forth the Delivery Point(s) for delivery of natural gas from Hutchinson to UNG. £ Contract Champs -- Hutchinson has the right to modify this Agreement due to changes imposed by 3rd party entities. 3. Term. The initial term for service under this Agreement is Ten (10) years. UNG must notify Hutchinson in writing one (1) year prior to the expiration of the term if LNG desires to continue service under this Agreement. If UNG has complied with all terms of this Agreement, and has no outstanding arrearages, LNG may, upon written notice provided to Hutchinson one (1) year prior to the expiration of UNG Firm Transportation Capacity Agreement 2 January 20, 2016 the current term, extend this Agreement for a mutually agreed -upon period. If a term for the extension cannot be agreed upon by UNG and Hutchinson, the parties agree to a minimum term of (2) two years. If such timely notice is not provided by UNG, Hutchinson is not obligated to renew service for UNG. Representatives of Hutchinson and UNG shall meet approximately two (2) years prior to the expiration date of the initial term of this Agreement to discuss future operations. 4. Rates. a. Rates For Service -- The following charges shall apply to the firm transportation capacity to be provided to UNG by Hutchinson: 1. Reservation Char e. Reservation Charge, per Dth of MDQ -- $6.90 per Month This charge may be adjusted, starting on June 1, 2017 and on each June 1 thereafter, according to any change in the CPI-U from the previous year; provided, however, that such charge shall never be less than $6.90. CPI-U shall mean the annual average Consumer Price Index — All Urban Consumers as published by the United States Department of Labor, Bureau of Statistics, Washington D.C. 2. Transportation _ Charge. Transportation Charge, per Dth, all usage during a month -- $0.00 b. Third PartChgrges. UNG is responsible for all charges imposed by a supplier, broker, marketer, or any other third party for any service that is provided to, or on behalf of, UNG by any of these entities. These charges include, but are not limited to, cost of gas, reservation charges, administrative fees, billing fees, minimum take charges, and any and all other types of charges from any such entity. Penalties. LNG shall pay any fines, additional amounts, or penalties imposed under the terms of this Agreement. 5. Billing m n Payment. a. Billing -- Reservation invoice will be rendered to UNG or its agent by the UNG Firm Transportation Capacity Agreement January 20, 2016 fifteenth day of the month preceding the month in which service is rendered by Hutchinson. Remaining bills will be rendered to UNG or its agent by the fifteenth day of the month following the month in which service is rendered by Hutchinson. b. Payment -- Payment is due from UNG on or before the fifteenth day following the date the bill is issued by Hutchinson. A late payment charge of one and one-half percent per month, or the legally authorized maximum interest rate, whichever is lower, shall be levied on any unpaid balances. C. Pieline,w Suolier,And Third Party Charles -- Any charges which Hutchinson reasonably incurs on behalf of UNG from any pipeline, supplier, or other third party, shall be passed through to, and paid in full by, UNG. Hutchinson shall provide to UNG in writing full details concerning any such charges. d. Good Faith Dispute -- If UNG, in good faith, disputes the amount of any invoice rendered by Hutchinson, or any part thereof, UNG shall pay the full amount of the invoice. Hutchinson shall promptly provide in writing to UNG supporting documentation acceptable in industry practice to support the amount invoiced, and UNG shall promptly provide to Hutchinson in writing the basis for any dispute, including supporting documentation acceptable in industry practice. In the event the parties are unable to resolve such dispute, either party may pursue any remedy available at law or in equity to enforce its rights pursuant to this provision. e. Ri ,ht To Inspect -- A party shall have the right, at its own expense, upon reasonable notice and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under this Agreement. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary information not directly relevant to transactions under this Agreement. £ Finality -- All invoices and billings shall be conclusively presumed final and accurate and all associated claims for under- or overpayments shall be deemed waived unless such invoices or billings are objected to, in writing, with adequate explanation and/or documentation, within two years after the initial billing date for the invoice or bill in dispute. 6. Conditions of Service. a. Firm Capacity Requirement -- Hutchinson hereby certifies that it has sufficient firm transportation capacity to provide the amount of firm transportation service to UNG pursuant to the terms of this Agreement for UNG Firm Transportation Capacity Agreement 4 January 20, 2016 the term of this Agreement. b. Effect of Failure ToProvideGas Sul)lies 1. UNG agrees to immediately curtail its deliveries from Hutchinson under this Agreement when UNG's gas supplies are not received into Hutchinson's system, unless the parties agree otherwise in writing. 2. UNG shall indemnify, defend and hold Hutchinson harmless for any damages caused by UNG's failure to deliver, or to have delivered on its behalf, supplies for transportation over Hutchinson's system. 7. Operational Rey uirements. a. BTU Ad justment -- The quantity of gas received by Hutchinson from UNG and the quantity of gas delivered to UNG by Hutchinson shall be thermally balanced. Billed volumes may be adjusted when the BTU content of UNG's gas varies from 1,000 BTUs per cubic foot. b. Gas Quality -- Gas received by Hutchinson on behalf of UNG shall be commercially clean and merchantable. Such gas shall be comparable in quality to and interchangeable with gas purchased by Hutchinson. Hutchinson reserves the right to refuse to accept gas that does not meet Hutchinson's quality specifications as specified in this Agreement. C. Respgr sibilit For Transl)or ing Gas Supplies -- Hutchinson shall have the sole responsibility for transporting natural gas supplies to the Delivery Point(s). GMT shall have the sole responsibility for transporting natural gas from the Delivery Point(s). 8. Agents. a. Designation of Agents -- UNG may designate an agent for nominating and scheduling volumes for transportation on Hutchinson's system. UNG shall notify Hutchinson in writing at least fifteen (15) business days prior to the first day of the month in which such services will be utilized that a third party has been designated as UNG's agent and shall act as agent for UNG for purposes of nominations, billing, and/or other functions as specified by UNG. If UNG utilizes an agent for any or all of these purposes, UNG agrees that information to be supplied by Hutchinson to UNG may be supplied only to the agent and that information supplied by the agent to Hutchinson shall be relied upon by Hutchinson as if provided by UNG. Hutchinson shall be held harmless for any errors between UNG and said agent. Such designation shall remain in effect until UNG notifies Hutchinson in writing that the previously designated agent is no longer its UNG Firm Transportation Capacity Agreement January 20, 2016 agent. b. Information Reuired -- UNG shall provide the following information to Hutchinson concerning each agent used by UNG for any purpose: Name and address of the agent or agents; 2. Primary and secondary contact persons for the agent or agents; Telephone and facsimile number for primary and secondary contact persons for the agent or agents; and 4. Twenty-four hour telephone number for weekends and holidays for the agent or agents. UNG To Remain Liable -- UNG may elect to have its bill for services under this Agreement sent directly to its agent. However, if UNG selects this option, UNG remains fully liable for any bill rendered by Hutchinson. All deadlines set forth in this Agreement shall continue to apply, regardless of whether Hutchinson's bill is sent directly to UNG or to UNG's designated agent. 9. Nominations and Scheduling. a. First Of The Month Nominations, -- By 7:00 a.m. Central Clock Time ("C.C.T."), at least five (5) business days prior to the first of each month UNG or its designated agent shall provide Hutchinson a written estimate of UNG's daily firm transportation capacity requirements and total monthly requirement for transportation service under this Agreement. If UNG has more than one meter, said nominations shall be provided by meter. Nominations shall be limited to the meter or meters specified in this Agreement, as modified by further agreement of the parties in writing. Absent agreement in writing, nominations by UNG or its designated agent may not exceed UNG's maximum daily quantity ("MDQ"). b. D ily Nominations — UNG or its designated agent shall notify Hutchinson of any requested change to its nomination, in writing, by 8:00 a.m. C.C.T at least one (1) business day prior to the date of the requested change. Hutchinson shall grant such requests in its reasonable discretion. Absent agreement in writing, nominations by UNG or its designated agent may not exceed UNG's MDQ. C. Chances To Nominations Resulting From Curtailment or Intega Lion -- If a curtailment or interruption is called under the terms and conditions of this Agreement, Hutchinson shall notify UNG or its designated agent as UNG Firm Transportation Capacity Agreement January 20, 2016 soon as reasonably possible and as necessary to maintain the integrity of the system, of the receipt and delivery conditions applicable to service under this Agreement. Such conditions shall become effective beginning the next gas day commencing at 9:00 a.m. C.C.T., or at such earlier time as is necessary. Under these conditions, Hutchinson shall have the right to require reductions in previously nominated amounts under this provision, consistent with other provisions of this Agreement. d. Waiver -- Hutchinson may, in its sole discretion and on a non- discriminatory basis, waive any of the nomination requirements set forth in this section if Hutchinson determines that it can accommodate such nominations. e. Late Nomination -- If Hutchinson has not waived the nomination requirements, Hutchinson may still, in its sole discretion and on a non- discriminatory basis, confirm a late nomination. 10. Balancing. a. Daily Balancint, Required -- On a daily basis, UNG or its designated agent shall balance (1) the receipt of UNG's gas volumes into Hutchinson's system with (2) the delivery of thermally equivalent gas volumes by Hutchinson to UNG at the meter or meters. Differences between daily receipts from and daily deliveries to UNG shall be accumulated in an imbalance account. UNG or its designated agent shall monitor receipts and deliveries on its behalf and shall adjust its consumption of gas so as to ensure that its receipts and deliveries are in balance to the extent practicable. b. Positive„ And Negative Daily Or Monthl Imbalances, -- A Positive Daily or Monthly Imbalance occurs when receipts of gas on behalf of UNG exceed deliveries of gas to UNG. A Negative Daily or Monthly Imbalance occurs when deliveries of gas to UNG exceed receipts of gas on behalf of UNG. C. Dail Balancing Limitation -- UNG shall be permitted to incur a Positive Daily Imbalance or a Negative Daily Imbalance of up to 10% of UNG's daily nominated quantity except during curtailment or interruption under the terms of this Agreement. During curtailment or interruption, UNG shall be required to abide by the terms of any curtailment or interruption instructions issued by Hutchinson. d. Monthly Balancin,. Limitation -- UNG may incur a cumulative monthly Positive or Negative imbalance of up to and including 10% of UNG's MDQ. No imbalance charges shall apply to cumulative monthly imbalances up to and including this 10% of UNG's MDQ. UNG Firm Transportation Capacity Agreement 7 January 20, 2016 11. Schedulin and Imbalance Charges. a. Daily Scheduling Char es. 1. Dailv Deliveries In Excess Of Nominated Quantities -- If daily delivery to UNG exceeds UNG's nomination for that day, UNG shall pay the following charges: For deliveries in excess of UNG's daily nomination plus the daily tolerance of 10% of UNG's daily nominated quantity, UNG shall pay an additional charge of $0.10/Dth. For deliveries in excess of UNG's MDQ, UNG shall pay an additional transportation charge of $0.50/Dth for each occurrence in addition to any other charges that may apply. Hutchinson may elect to waive these charges on a particular day or days. Waiver of these charges on any day or days shall not be construed to be a waiver for any subsequent day. 2. Daily Deliveries Less Than Nominated Quantities -- If daily delivery to UNG is less than UNG's nomination for that day, UNG shall pay the following charges: For deliveries that are less than UNG's daily nomination minus the daily tolerance of 10% of UNG's daily nominated quantity, UNG shall pay an additional charge of $0.10/Dth. Hutchinson may elect to waive these charges on a particular day or days. Waiver of these charges on any day or days shall not be construed to be a waiver for any subsequent day. 3. Other Charges -- If Hutchinson incurs any additional, verifiable charges from its interstate pipeline supplier directly as a result of UNG's imbalance, those costs shall be paid in full by UNG. Hutchinson shall provide to UNG full details of these charges in writing on or before the billing date. 4. Effect On Charles -- These charges are in addition to, and not in place of, any charges imposed on UNG by an entity other than Hutchinson. Limitations -- Notwithstanding any other provision of this Agreement, UNG shall not be liable for any daily scheduling charges incurred as a result of Hutchinson's failure to nominate, UNG Firm Transportation Capacity Agreement 8 January 20, 2016 schedule, and/or confirm the correct amount of daily firm transportation capacity for UNG. In such instance, Hutchinson shall pay such daily scheduling charges or reimburse UNG for such daily scheduling charges paid by UNG. b. Settlement of Monthl r Imbalances, -- UNG shall be required to settle outstanding imbalances on a monthly basis. On a monthly basis, by the 20th of the following month or the next business day following the 20th of the month if the 20th of the month falls on a Saturday, Sunday, or legal holiday, Hutchinson shall provide an Imbalance Statement to UNG detailing the daily quantities received on behalf of UNG and the daily volumes delivered to UNG. Any Positive or Negative imbalance remaining at the end of a given month shall be resolved as follows: Positive Imbalance -- In addition to any other applicable charges, including, but not limited to, the charges set forth above, any Positive Monthly Imbalance greater than 10% of UNG's MDQ shall be assessed a Positive Monthly Imbalance Charge of $0.20/Dth. Hutchinson shall allow UNG to roll the outstanding imbalance quantities into following month. 2. Negative Imbalance -- In addition to any other applicable charges, including, but not limited to, the charges set forth above, any Negative Monthly Imbalance greater than 10% of UNG's MDQ shall be assessed a Negative Monthly Imbalance Charge of $0.20/Dth. Hutchinson shall allow UNG to roll the outstanding imbalance quantities into following month. 3. Other Charges -- If Hutchinson incurs any additional, verifiable charges from its interstate pipeline supplier directly as a result of UNG's imbalance, those costs shall be paid in full by UNG. Hutchinson shall provide to UNG full details of these charges in writing on or before the billing date. 4. Effect On Charges -- These charges are in addition to, and not in place of, any charges imposed on UNG by an entity other than Hutchinson. Limitations -- Notwithstanding any other provision of this Agreement, UNG shall not be liable for any imbalance charges incurred as a result of Hutchinson's failure to nominate, schedule, and/or confirm the correct amount of firm transportation capacity. In such instance, Hutchinson shall pay for such imbalance charges or reimburse UNG for such imbalance charges paid by UNG. UNG Firm Transportation Capacity Agreement 9 January 20, 2016 12. Penalty For Unauthorized Takes During Curtailment Or Interruption. Provided that Hutchinson has complied with the terms of this Agreement with respect to such curtailment or interruption, if UNG fails to curtail or interrupt its takes when directed to do so by Hutchinson, UNG shall be billed for all volumes taken in excess of the applicable limitation at a rate equal to the Daily Chicago Index plus $10.00 per Dth. In addition, Hutchinson shall have the right to disconnect UNG's supply of gas if UNG fails to curtail or interrupt its use of gas when and as directed by Hutchinson. Hutchinson must restore such service as soon as practicable following any such disconnection. 13. Title Liability, and Insurance. a. Title -- Gas received by Hutchinson on behalf of LNG for delivery to GMT shall remain the property of UNG. b. Liability -- Hutchinson shall not be liable to UNG for any loss of gas for any cause other than gross negligence or misconduct by Hutchinson or its employees. UNG's gas may be commingled with other gas supplies in Hutchinson's system. C. Insurance -- UNG shall be responsible for maintaining sufficient insurance as necessary to protect its property and other interests in the gas prior to, during, and after its receipt by Hutchinson. Hutchinson shall be responsible for maintaining sufficient insurance as necessary to protect its property and other interests in providing transportation service under this Agreement to UNG. 14. Curtailment and Interru tion. Service under this Agreement may be curtailed or interrupted as necessary due to physical, operational, or other similar constraints on Hutchinson's system. If Hutchinson is required to curtail or interrupt service due to capacity constraints, Force Majeure events, system integrity, or other conditions, any interruptible services provided to other entities by Hutchinson shall be curtailed completely before firm services are curtailed, and firm transportation services under this Agreement shall be curtailed on a pro rata basis with Hutchinson's other firm sales and/or transportation services. 15. Force Maieure. a. Definition -- Either party shall be excused from performance under this Agreement by Force Majeure acts and events. "Force Majeure" shall mean acts and events not within the control of the party claiming Force Majeure, and shall include, but not be limited to, acts of God, strikes, lockouts, material, equipment, or labor shortages, wars, riots, UNG Firm Transportation Capacity Agreement 10 January 20, 2016 insurrections, epidemics, landslides, earthquakes, floods, fires, storms, government or court orders, civil disturbances, explosions, breakage or accident to machinery or pipelines, freezing of wells or pipelines, or any other cause of whatever kind, whether specifically enumerated herein or not, that is not within the control of the party claiming Force Majeure. b. Effect If Hutchinson is unable to provide service under this Agreement due to a Force Majeure act or event, Hutchinson's obligation to provide service under this Agreement shall be suspended for the duration of the act or event. Hutchinson shall notify UNG of the Force Majeure event as soon as reasonably possible by any means practicable, including, but not limited to, telephone or facsimile, and shall confirm the details of the Force Majeure act or event in writing within a reasonable amount of time thereafter. Hutchinson shall work to remedy the Force Majeure act or event as soon as reasonably possible and shall keep UNG apprised of the time, date, and circumstances when service under this Agreement shall be restored. UNG is not required to pay any charges under this Agreement during the term of the Force Majeure act or event. 2. If UNG is unable to take service under this Agreement due to a Force Majeure act or event, Hutchinson's obligation to provide service under this Agreement shall be suspended for the duration of the act or event. UNG shall notify Hutchinson of the Force Majeure event as soon as reasonably possible by any means practicable, including, but not limited to, telephone or facsimile, and shall confirm the details of the Force Majeure act or event in writing within a reasonable amount of time thereafter. UNG shall work to remedy the Force Majeure act or event as soon as reasonably possible and shall keep Hutchinson apprised of the time, date, and circumstances when UNG will resume service under this Agreement. Hutchinson is not required to provide service under this Agreement during the term of the Force Majeure act or event. C. Limitations On Force Majeure -- Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is affected by any or all of the following circumstances: (i) the curtailment of interruptible or secondary firm transportation unless primary, in -path, firm transportation is also curtailed; (ii) the party claiming excuse failed to UNG Firm Transportation Capacity Agreement 11 January 20, 2016 remedy the condition and to resume the performance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship of either party. Notwithstanding any other provision of this Agreement, the party claiming Force Majeure shall not be excused from its responsibility for imbalance charges. 16. Notices. a. Addresses -- All invoices, payments and other communications made pursuant to this Agreement shall be made to the addresses specified in writing by the respective parties from time to time. b. Acceptable Forms -- All notices required hereunder may be sent by facsimile or mutually acceptable electronic means, a nationally recognized overnight courier service, first class mail, or hand delivered. C. Deliver , Date, -- In the absence of proof of the actual receipt date for such notices, the following presumptions will apply. Notices sent by facsimile shall be deemed to have been received upon the sending party's receipt of its facsimile machine's confirmation of successful transmission. If the day on which such facsimile is received is not a business day or is after five p.m. C.C.T., on a business day, then such facsimile shall be deemed to have been received on the next following business day. Notice by overnight mail or courier shall be deemed to have been received on the next business day after it was sent or such earlier time as is confirmed by the receiving party. Notice via first class mail shall be considered delivered five business days after mailing. 17. Laws, Regulations, and Orders. a. Service under this Agreement is subject to all present and future valid laws, orders, rules, regulations, etc, issued by any federal, state, or local authority having jurisdiction over the matters set forth herein. b. It is understood by UNG that it is economically feasible to enter into this agreement to provide firm transportation to UNG only due to the fact that Hutchinson is an unregulated municipal utility. If at any time any of the activities covered under this agreement become subject to regulation by the Public Utilities Commission of the State of Minnesota or any other state or federal agency which would not currently control the activities of Hutchinson under this agreement, Hutchinson shall have the option, at its sole discretion to pass all pro rata costs incurred, due to Hutchinson's regulation, to UNG for the length of this Agreement. UNG Firm Transportation Capacity Agreement 12 January 20, 2016 18. Miscellaneous Provisions. a. Declaration Of Invalidity -- If any provision of this Agreement is determined to be invalid, void, or unenforceable by any court or other entity having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement; and the parties agree to negotiate in good faith a replacement to such invalid, void or unenforceable provision and/or any other amendments as may be necessary to ensure that the Agreement as a whole reflects the original intentions of the parties. b. No Continuing -Waiver -- No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. C. Limitation On Agreement -- The parties expressly acknowledge and agree that it is neither the purpose of this Agreement nor their intent to create a partnership, joint venture contract or company, association or trust, fiduciary relationship or partnership between them. Except as expressly provided herein, neither Party shall have any authority to act for or assume any obligations, or responsibilities on behalf of, the other Party. d. Commlete Agreement -- This Agreement sets forth all understandings between the parties as of the effective date herein. Any prior contracts, understandings and representations, whether oral or written, relating to the matters addressed in this Agreement are merged into and superseded by this Agreement. This Agreement may be amended only by a writing executed by both Parties. e. Governing, Law -- The interpretation and performance of this Agreement shall be governed by the laws of Minnesota, excluding, however, any conflict of laws rule that would apply the law of another jurisdiction. f. Confidentiality. 1 egquired -- Neither Party shall disclose directly or indirectly without the prior written consent of the other party the terms of this Agreement to a third party except (i) in order to comply with any applicable law, legal process, order, regulation, or exchange rule; (ii) to the extent necessary for the enforcement of this Agreement; and (iii) to the extent necessary to implement and perform this Agreement. Each party shall notify the other party of any demand or proceeding of which it is aware which may result in disclosure of the terms of this Agreement (other than as permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The parties shall be entitled to all remedies available at law or in equity to enforce or seek relief in connection with this confidentiality obligation. The terms of this Agreement shall be kept confidential by the Parties hereto for two years from the expiration or termination of this Agreement. UNG Firm Transportation Capacity Agreement 13 January 20, 2016 In the event that disclosure is required by a governmental body or applicable law, the Party subject to such requirement may disclose the material terms of this Agreement to the extent so required, but shall promptly notify the other Party, prior to disclosure, and shall cooperate (consistent with the disclosing Party's legal obligations) with the other Party's efforts to obtain protective orders or similar restraints with respect to such disclosure at the expense of the other Party. g. Authority To Enter Agreement -- Each party to this Agreement represents and warrants that it has full and complete authority to enter into and perform this Agreement. Each person who executes this Agreement on behalf of either party represents and warrants that it has full and complete authority to do so and that such party will be bound thereby. h. No Third Part;v Beneficiary -- There is no third party beneficiary to this Agreement. UNG Firm Transportation Capacity Agreement 14 January 20, 2016 WHEREFORE, the Parties have executed this Agreement through their duly authorized representatives effective as of the date specified above HUTCHINSON UTILITIES COMMISSION By: Name: Title: Commission President . . . ........ Date: Witness: Date: / q -/ 6 By: Name: Title: Date: Witness: Date: UNITED NATURAL GAS L.L.C. By: Name: Title: q'* Date: od--- w. Date: With Acknowledgement of Greater Minnesota Transmission L.L.C. UNG Firm Transportation Capacity Agreement 15 January 20, 2016 NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT BETWEEN HUTCHINSON UTILITIES COMMISSION AND UNITED NATURAL GAS Attachment A Deliver Points United Natural Gas may receive gas from Hutchinson at the following Delivery Points: Station Name County CY State (1) Lafayette Interconnect Station Nicollet Lafayette Minnesota 16 Dear Hutchinson Utilities Commission, United Natural Gas, LL[(UNG)is awholly owned entity byCentral United Cooperative, anewly merged cooperative formerly United Farmers Cooperative and Central Region Cooperative as of UN(5would like to extend the natural gas firm transportation capacity agreement originally executed in2O1G,amended in2O18for one year beyond the stated term ofMay 3lst 2025. UNG is currently exploring an opportunity to sell the related infrastructure and expects tOhave a determination within this extension window. Sincereky, Nate Gieseke Central United Cooperative, CEO HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: Approval of the Fairfax Interconnect Agreement Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: In order for HUC to supply and transport natural gas to the City of Fairfax an interconnect agreement needs to be in place between both parties. The interconnect agreement establishes the commodity custody transfer point and the interconnection point between Hutchinson's natural gas pipeline facilities and Fairfax's natural gas pipeline facilities. This agreement also spells out the equipment necessary at the interconnection station to transport and read the flow of natural gas at predetermined pressures. A monthly fee of $660 is billed to Fairfax to provide monthly operation and maintenance of the facilities. This routine work includes: general maintenance and monthly testing, including monthly calibration of pressure and temperature transmitters, remote terminal unit maintenance, annual inspections and proving of meters. Other non-rountine/special services work will be billed according to Exhibit A. BOARD ACTION REQUESTED: Approval of the Fairfax Interconnect Agreement Fiscal Impact: Min. $7,920 Included in current budget: Yes Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: CITY OF FAIRFAX INTERCONNECT AGREEMENT THIS INTERCONNECT AGREEMENT, (THE 'AGREEMENT"), IS MADE AND ENTERED INTO THIS DAY OF 2026, TO BE EFFECTIVE AS OF THE 1 ST DAY OF APRIL, 2026, BY AND BETWEEN CITY OF FAIRFAX ("FAIRFAX") A MINNESOTA MUNICIPALITY WITH OFFICES LOCATED AT 18 'I STAVE SE, FAIRFAX, MINNESOTA 55332 AND HUTCHINSON UTILITIES COMMISSION (71HUTCHINSON") A MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA 55350. FAIRFAX AND HUTCHINSON SHALL HEREINAFTER SOMETIMES BE REFERRED TO SEPARATELY AS "PARTY" OR JOINTLY AS "PARTIES." WITNESSETH: WHEREAS, HUTCHINSON OWNS AND OPERATES AN EXISTING INTRASTATE NATURAL GAS PIPELINE SYSTEM WHICH COMMENCES FROM A POINT ON THE NORTHERN BORDER PIPELINE NEAR TRIMONT, MINNESOTA TO A POINT OF TERMINUS NEAR HUTCHINSON, MINNESOTA; AND WHEREAS, FAIRFAX DESIRES TO ESTABLISH AND MAINTAIN INTERCONNECTION BETWEEN ITS PIPELINE FACILITIES AND THE NATURAL GAS PIPELINE FACILITIES OF HUTCHINSON AND HUTCHINSON IS WILLING TO ESTABLISH AND MAINTAIN SUCH INTERCONNECTION UNDER THE TERMS AND CONDITIONS SET FORTH HEREIN; AND WHEREAS, FAIRFAX AND HUTCHINSON DESIRE TO HAVE THE INTERCONNECTION BETWEEN THEIR RESPECTIVE FACILITIES IN SERVICE ON OR BEFORE APRIL 1, 2026; NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL COVENANTS AND AGREEMENTS HEREINAFTER SET FORTH, THE PARTIES, EACH FOR ITSELF AND FOR ITS SUCCESSORS AND PERMITTED ASSIGNS, HEREBY AGREE AS FOLLOWS: I . THE POINT OF INTERCONNECTION BETWEEN HUTCHINSON'S NATURAL GAS PIPELINE FACILITIES AND FAIRFAX'S NATURAL GAS PIPELINE FACILITIES SHALL BE LOCATED ON PROPERTY IN SIBLEY COUNTY, MINNESOTA LEGALLY DESCRIBED AS FOLLOWS: Fairfax Interconnect Agreement j April 1, 2026 A PIECE OF LAND 100 FT. BY 100 FT. LYING SOUTH OF HIGHWAY 19 IN NE I I4NE 1 I4 OF SECTION 6-1 1 2N- 30W. (HEREINAFTER REFERRED TO AS THE "FAIRFAX METER STATION"). 2. HUTCHINSON WILL OWN AND MAINTAIN THE FACILITIES LISTED IN SECTIONS 2.1 THROUGH 2.7 (HEREIN REFERRED TO AS THE "HUTCHINSON INTERCONNECT FACILITIES") CAPABLE OF DELIVERING TO FAIRFAX 8 MMSCFID AT HUTCHINSON'S LINE PRESSURE. HUTCHINSON LINE PRESSURE AT THE CUSTODY TRANSFER POINT MAY FROM TIME TO TIME BE REDUCED BELOW HUTCHINSON'S MAINLINE PRESSURE BECAUSE OF FRICTIONAL LOSSES CAUSED BY THE HUTCHINSON DELIVERY FACILITIES. 2.1 METER RUN. A SINGLE MASS FLOW METER AND SPECIFIC GRAVITY METER IN ADDITION TO METER RUN PIPING DESIGNED AND INSTALLED IN ACCORDANCE WITH HUTCHINSON ENGINEERING STANDARDS. THE METER RUN WILL BE USED FOR CUSTODY TRANSFER GAS VOLUME MEASUREMENT. 2.2 PIPING. PIPING IS INSTALLED FROM THE SIDE VALVE TO THE PIPING ON THE METER AND THEN TO THE DOWNSTREAM FLANGE OF THE CUSTODY TRANSFER POINT. AN INSULATING GASKET KIT IS INSTALLED IN THE DOWNSTREAM FLANGE OF THE CUSTOMER VALVE FOR ELECTRICAL ISOLATION BETWEEN THE HUTCHINSON AND FAIRFAX PIPING SYSTEMS. ALL BURIED PIPING INSTALLED IN THIS AREA SHALL BE AT A MINIMUM DEPTH OF 3 FEET. THE ABOVE GRADE PIPING IS DESIGNED PER HUTCHINSON ENGINEERING STANDARDS. HUTCHINSON PIPING AT THE HUTCHINSON INTERCONNECT FACILITIES IS DESIGNED FOR A DESIGN PRESSURE OF 1,440 PSIG WITH A 0.5 DESIGN FACTOR PER U.S. DEPARTMENT OF TRANSPORTATION (DOT) PIPELINE SAFETY REGULATIONS, PART 192 FOR NATURAL GAS. THE FAIRFAX INTERCONNECT PIPING IS DESIGNED FOR 1,440 PSIG. IF A LOWER DESIGN PRESSURE IS EVER INSTALLED ON THE INTERCONNECT PIPING, FAIRFAX SHALL INSTALL CODE APPROVED SAFETY VALVES TO PROTECT THEIR SYSTEM FROM ACCIDENTAL OVERPRESSURE BY THE HUTCHISON GAS SUPPLY. 2.3 FILTERIMETER SKID. THE METER ASSEMBLY CONTAINS THE METER, AND A BYPASS LINE AROUND THE FILTER FOR FILTER Fairfax Interconnect Agreement 2 April 1, 2026 MAINTENANCE. THE STATION DESIGN WILL NOT INCLUDE AUTOMATIC STATION BLOW DOWN. 2.4 VALVES. THE SIDE VALVE AND THE CUSTOMER VALVE WILL BE MANUALLY OPERATED. 2.5 PRESSURE AND TEMPERATURE TRANSMITTERS. ALL TRANSMITTERS SHALL ADHERE TO HUTCHINSON ENGINEERING STANDARDS. 2.6 CABLE AND CONDUIT. ALL NECESSARY CONDUIT AND CABLE FROM THE MEASUREMENT FACILITIES TO THE RTU. CONDUIT SHALL BE GALVANIZED AND RIGID ABOVE GRADE AND PVC COATED RIGID BELOW GROUND. 2.7 REMOTE TERMINAL UNIT (RTU). HUTCHINSON WILL INSTALL, MAINTAIN, AND OPERATE A RTU AND A FLOW COMPUTER WITH ELECTRONIC FLOW MEASUREMENT (EFM) CAPABILITIES. 3. HUTCHINSON SHALL CONTROL ALL VOLUMES DELIVERED TO THE FAIRFAX METER STATION. 4. FAIRFAX WILL OWN, MAINTAIN AND OPERATE THE FOLLOWING FACILITIES (HEREIN REFERRED TO AS THE "FAIRFAX INTERCONNECT FACILITIES") DOWNSTREAM OF THE CUSTODY TRANSFER POINT: 4.1 PIPING AND RELATED EQUIPMENT. A CONNECTING LINE WITH OVERPRESSURE PROTECTION AS REQUIRED. 5. HUTCHINSON MAY SUPPLY FAIRFAX WITH A SIGNAL REPRESENTATIVE OF THE INSTANTANEOUS NATURAL GAS FLOW RATE OR EMAIL A DAILY USAGE RATE IF REQUIRED. FAIRFAX WILL PROVIDE ITS OWN POWER, DATA COMMUNICATION EQUIPMENT AND TELEPHONE SERVICE. GROUNDING SHALL BE CONNECTED TO THE HUTCHINSON'S GROUNDING GRID. 6. THE DATA INFORMATION COLLECTED BY THE RTU WILL BE ACCESSED BY HUTCHINSON'S TELECOMMUNICATION FACILITIES ON A CONTINUOUS BASIS. HUTCHINSON SHALL ALLOW FAIRFAX TO ACCESS VOLUMES, TEMPERATURE AND PRESSURE AT THE INTERCONNECT. HUTCHINSON WILL DEDICATE A COMMUNICATION PORT ON HUTCHINSON'S FLOW COMPUTER FOR READ-ONLY USE BY FAIRFAX. FAIRFAX MAY INSTALL ITS OWN SENSOR TO MEASURE VOLUMES, TEMPERATURE AND PRESSURE ON ITS SIDE OF THE INTERCONNECT. FAIRFAX AGREES THAT SUCH INTERCONNECTION WILL NOT CAUSE INTERFERENCE TO HUTCHINSON'S EQUIPMENT. Fairfax Interconnect Agreement 3 April 1, 2026 HUTCHINSON MAKES NO WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA PROVIDED TO FAIRFAX PURSUANT TO THIS AGREEMENT; HOWEVER, UPON DISCOVERING, OR BEING ALERTED TO, A DISCREPANCY IN THE DATA BETWEEN THE PARTIES' RESPECTIVE EQUIPMENT, THE PARTIES SHALL COOPERATE WITH EACH OTHER AND MAKE ANY CHANGES TO THEIR RESPECTIVE EQUIPMENT AS REASONABLY NECESSARY TO RESOLVE THE DISCREPANCY. THE PARTIES SHALL EACH BE RESPONSIBLE FOR THEIR OWN EQUIPMENT RISKS OF BODILY INJURY, DEATH OR PROPERTY DAMAGE AND FOR ANY AND ALL ACTIONS, CLAIMS, LIABILITIES OR DAMAGES ARISING OUT OF THEIR OWN NEGLIGENCE. 7. THE CUSTODY TRANSFER POINT WILL BE LOCATED AT THE OUTLET FLANGE OF THE GUS GMER VA VE HUTCHINSON METERING SKID. 8. FAIRFAX IS RESPONSIBLE FOR CONSTRUCTING AND MAINTAINING THE FAIRFAX INTERCONNECT FACILITIES, PROVIDED THAT HUTCHINSON SHALL HAVE THE RIGHT -TO APPROVE THE DESIGN OF ALL FAIRFAX INTERCONNECT FACILITIES AT THE FAIRFAX METER STATION. HUTCHINSON SHALL HAVE THE RIGHT TO REVIEW ALL CONSTRUCTION PROCEDURES AND TO INSPECT ALL CONSTRUCTION WORK IN PROGRESS FOR THE FAIRFAX INTERCONNECT FACILITIES LOCATED AT THE FAIRFAX METER STATION. IF IT SHOULD APPEAR THAT ANY OF THE CONSTRUCTION WORK ON THE FAIRFAX INTERCONNECT FACILITIES IS ENDANGERING THE FACILITIES OF HUTCHINSON, THEN HUTCHINSON SHALL HAVE THE RIGHT TO STOP WORK UNTIL NECESSARY CORRECTIONS ARE MADE AND APPROVED BY HUTCHINSON. HUTCHINSON SHALL HAVE THE RIGHT TO HAVE AT LEAST ONE REPRESENTATIVE PRESENT WHEN ANY WORK IS REQUIRED AT THE FAIRFAX METER STATION. FAIRFAX SHALL NOTIFY HUTCHINSON AS TO THE SCHEDULE AND THE NATURE OF ANY WORK TO BE PERFORMED NO LESS THAN ONE (1) WEEK IN ADVANCE OF THE WORK. 9. IF ADDITIONAL PROPERTY ADJACENT TO THE FAIRFAX METER STATION IS NECESSARY TO CONSTRUCT, OPERATE AND TO OBTAIN ACCESS TO THE HUTCHINSON INTERCONNECT FACILITIES, SUCH ADDITIONAL PROPERTY AND RIGHT-OF-WAY WILL BE ACQUIRED BY HUTCHINSON. 10. HUTCHINSON SHALL OBTAIN ALL OF THE PROPERTY OR RIGHT-OF-WAY NECESSARY FOR THE CONSTRUCTION, OPERATION AND ACCESS TO THE FAIRFAX INTERCONNECT FACILITIES AND FAIRFAX'S RELATED FACILITIES. HUTCHINSON SHALL OBTAIN AND BE IN COMPLIANCE WITH ALL APPLICABLE REGULATORY AND/OR ENVIRONMENTAL PERMITS AND CLEARANCES NECESSARY FOR THE CONSTRUCTION AND OPERATION OF FAIRFAX'S FACILITIES. FAIRFAX SHALL BE IN Fairfax Interconnect Agreement 4 April 1, 2026 COMPLIANCE WITH ALL FEDERAL, STATE, AND LOCAL LAWS AND REGULATIONS THAT GOVERN THE OPERATION OF THE FAIRFAX INTERCONNECT FACILITIES. FAIRFAX SHALL BE RESPONSIBLE FOR THE GENERAL MAINTENANCE AND SITE UP -KEEP (INCLUDING PAINTING, WEED CONTROL, AND GENERAL BUILDING AND GROUND MAINTENANCE) OF THE FAIRFAX AND HUTCHINSON INTERCONNECT SITE. 1 1 . HUTCHINSON SHALL OBTAIN ALL OF THE PROPERTY OR RIGHT -OF' -WAY NECESSARY FOR THE CONSTRUCTION, OPERATION AND ACCESS TO THE HUTCHINSON INTERCONNECT FACILITIES. HUTCHINSON SHALL OBTAIN AND BE IN COMPLIANCE WITH ALL APPLICABLE REGULATORY AND/OR ENVIRONMENTAL PERMITS AND CLEARANCES NECESSARY FOR THE CONSTRUCTION AND OPERATION OF ITS FACILITIES. HUTCHINSON SHALL BE IN COMPLIANCE WITH ALL FEDERAL, STATE, AND LOCAL LAWS AND REGULATIONS THAT GOVERN THE OPERATION OF THE HUTCHINSON INTERCONNECT FACILITIES. 12. HUTCHINSON WILL OPERATE AND MAINTAIN THE HUTCHINSON INTERCONNECT FACILITIES. FAIRFAX SHALL PAY TO HUTCHINSON A MONTHLY OPERATION AND MAINTENANCE FEE FOR ROUTINE SERVICES OF $660 PER MONTH EFFECTIVE AS OF THE 1 ST DAY OF APRIL 2026. FOR PURPOSES OF THIS AGREEMENT, ROUTINE SERVICES SHALL INCLUDE THE FOLLOWING: (1) GENERAL MAINTENANCE AND MONTHLY TESTING OF THE HUTCHINSON INTERCONNECT FACILITIES (INCLUDING MONTHLY CALIBRATION OF PRESSURE AND TEMPERATURE TRANSMITTERS, REMOTE TERMINAL UNIT MAINTENANCE, AND ANNUAL INSPECTION AND PROVING OF METERS); NOT INCLUDING RESTORATION OF DAMAGE TO RIGHT-OF-WAY, SITES, BUILDINGS, THE HUTCHINSON INTERCONNECT FACILITIES, OR PIPING CAUSED BY FLOODING, FIRE OR FROST HEAVING. 12.1 FAIRFAX SHALL ALSO REIMBURSE HUTCHINSON FOR ANY MATERIALS AND SUPPLIES PURCHASED AND CONTRACTED SERVICES (AT THE RATES AS PROVIDED IN SECTIONS 16.2 AND 16.3) IN CONNECTION WITH THE PROVISION OF ROUTINE SERVICES. 13. IN ADDITION TO THE ROUTINE SERVICES SET FORTH ABOVE, HUTCHINSON SHALL, PERFORM SPECIAL SERVICES FROM TIME TO TIME AS HUTCHINSON DETERMINES, ARE NECESSARY TO MAINTAIN THE HUTCHINSON INTERCONNECT FACILITIES UPON THE PRIOR WRITTEN APPROVAL OF FAIRFAX. "SPECIAL SERVICES" MAY INCLUDE, WITHOUT LIMITATION, THE FOLLOWING: (I) MAINTENANCE OF ROADS; (II) SPECIAL CONSTRUCTION; (III) OPERATION OR MAINTENANCE SERVICES; (IV) RECONSTRUCTION AND RECONDITIONING OF EQUIPMENT; AND (V) Fairfax Interconnect Agreement 5 April 1, 2026 OVERHAUL, AND/OR REPLACEMENT OF THE HUTCHINSON INTERCONNECT FACILITIES. HUTCHINSON WILL PROCURE AND FURNISH ALL MATERIALS, EQUIPMENT, SUPPLIES, SERVICES, AND LABOR NECESSARY FOR SUCH SPECIAL SERVICES. IF FAIRFAX APPROVES SUCH SPECIAL SERVICES, EXPENSES WILL BE PAID IN ACCORDANCE WITH SECTION 16 BELOW, AND HUTCHINSON SHALL INVOICE FAIRFAX FOR ALL SUCH EXPENSES SO INCURRED AND FAIRFAX SHALL PAY THE INVOICED AMOUNTS. 14. IN CASE OF AN EXPLOSION, FIRE, STORM, OR OTHER EMERGENCY WHICH MIGHT THREATEN LIFE OR PROPERTY OR RENDER THE HUTCHINSON INTERCONNECT FACILITIES OR ANY PART THEREOF INCAPABLE OF CONTINUED OPERATION, HUTCHINSON MAY, AT ITS SOLE DISCRETION, PROVIDE SUCH SERVICES (HEREIN CALLED "EMERGENCY SERVICES") AND INCUR SUCH EXPENSES AS IN ITS SOLE OPINION ARE REQUIRED AND CAN BE PROVIDED BY HUTCHINSON TO DEAL WITH SUCH EMERGENCY, AND SHALL IMMEDIATELY REPORT SUCH EMERGENCY TO FAIRFAX. AS SOON AS PRACTICAL, AFTER SUCH EXPENSES HAVE BEEN INCURRED, HUTCHINSON SHALL NOTIFY FAIRFAX THAT SUCH EXPENSES HAVE BEEN INCURRED, AND IN ACCORDANCE WITH SECTION 16 BELOW, SHALL INVOICE FAIRFAX FOR ALL SUCH EXPENSES SO INCURRED AND FAIRFAX SHALL PAY THE INVOICED AMOUNTS. 15. HUTCHINSON SHALL INVOICE FAIRFAX ON OR BEFORE THE STH DAY OF EACH MONTH FOR THE FOLLOWING AMOUNTS: (I) THE FOLLOWING MONTHS' OPERATION AND MAINTENANCE FEE; (11) THE PREVIOUS MONTH'S MATERIALS AND SUPPLIES PURCHASED; (III) THE PREVIOUS MONTHS CONTRACTED SERVICES; AND (IV) ANY AMOUNT DUE UNDER SECTIONS 13 AND 14. THE MONTHLY OPERATION AND MAINTENANCE FEE FOR ROUTINE SERVICES WILL BE FIXED FROM THE EFFECTIVE DATE OF THE INTERCONNECT AGREEMENT UNTIL DECEMBER 31, 203 1. THEREAFTER, THE MONTHLY FEE FOR ROUTINE SERVICES MAY BE INCREASED ON AN ANNUAL BASIS, PROVIDED THAT ANY SUCH INCREASE SHALL BE PROPORTIONAL TO INCREASES IN COSTS INCURRED BY HUTCHINSON RELATED TO ITS NATURAL GAS PIPELINE FACILITIES, AND UNDER NO CIRCUMSTANCES SHALL THE MONTHLY FEE FOR ROUTINE SERVICES INCREASE BY MORE THAN 10% OVER THE PREVIOUS YEAR'S FEE. HUTCHINSON WILL NOTIFY FAIRFAX OF ANY SUCH INCREASE AT LEAST 90 DAYS PRIOR TO JANUARY 1 OF EACH SUBSEQUENT YEAR. IN THE EVENT PAYMENT OF ANY INVOICE AMOUNT IS NOT MADE WITHIN 15 BUSINESS DAYS OF RECEIPT OF THE INVOICE, INTEREST SHALL ACCRUE ON ALL UNPAID AMOUNTS AT THE RATE OF 10% PER ANNUM, OR THE LEGALLY AUTHORIZED MAXIMUM INTEREST RATE, WHICHEVER IS LOWER. Fairfax Interconnect Agreement 6 April 1, 2026 16. THE CHARGES FOR SPECIAL SERVICES SHALL BE COMPUTED IN ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A, ATTACHED HERETO AND INCORPORATED BY THIS REFERENCE. THE CHARGES FOR ANY STANDBY EQUIPMENT, MATERIALS AND SUPPLIES, CONTRACTED SERVICES, RENTALS AND REIMBURSABLE EXPENSES OF EMPLOYEES INCURRED IN CONJUNCTION WITH THE PERFORMANCE OF THE SPECIAL SERVICES SHALL BE IN ADDITION TO THE CHARGES COMPUTED IN ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A AND SHALL BE CALCULATED IN ACCORDANCE WITH SECTIONS 1 6. 1 THROUGH 16.6 BELOW. THE CHARGES FOR EMERGENCY SERVICES SHALL BE COMPUTED IN ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A. THE CHARGES FOR ANY STANDBY EQUIPMENT, MATERIALS AND SUPPLIES, CONTRACTED SERVICES, RENTALS AND REIMBURSABLE EXPENSES OF EMPLOYEES INCURRED IN CONJUNCTION WITH THE PERFORMANCE OF THE EMERGENCY SERVICES SHALL BE IN ADDITION TO THE CHARGES COMPUTED IN ACCORDANCE WITH THE RATES PROVIDED IN EXHIBIT A AND SHALL BE CALCULATED IN ACCORDANCE WITH SECTIONS 1 6. 1 THROUGH 16.6 BELOW. 16.1 STANDBY EQUIPMENT. THE CHARGES FOR EQUIPMENT MOBILIZED AND STANDING BY FOR THE PROVISIONS OF SPECIAL SERVICES OR EMERGENCY SERVICES SHALL BE COMPUTED USING ONE-HALF 0 I2) THE RATES PROVIDED IN EXHIBIT A. 16.2 MATERIALS AND SUPPLIES. THE CHARGES FOR MATERIALS AND SUPPLIES PURCHASED IN CONJUNCTION WITH THE PROVISION OF ROUTINE SERVICES, SPECIAL SERVICES OR EMERGENCY SERVICES SHALL BE THE ACTUAL COST OF SUCH MATERIALS AND SUPPLIES PLUS 1 5% (FIFTEEN PERCENT) OF THE COST FOR BILLING AND HANDLING. 16.3 CONTRACTED SERVICES. THE CHARGES FOR ANY PORTION OF THE ROUTINE SERVICES, SPECIAL SERVICES, OR EMERGENCY SERVICES THAT HUTCHINSON CONTRACTS FOR WITH OTHERS SHALL BE THE ACTUAL COST OF SUCH SERVICES PLUS 1 5% (FIFTEEN PERCENT) OF THE COST FOR BILLING AND HANDLING. 16.4 RENTALS. THE CHARGES FOR ANY RENTALS USED IN CONJUNCTION WITH THE PROVISION OF SPECIAL SERVICES OR EMERGENCY SERVICES SHALL BE THE ACTUAL COST OF SUCH RENTAL PLUS 15% (FIFTEEN PERCENT) OF THE COST FOR BILLING AND HANDLING. Fairfax Interconnect Agreement 7 April 1, 2026 16.5 REIMBURSABLE EXPENSES OF EMPLOYEES. REASONABLE PERSONAL AND TRAVEL EXPENSES OF EMPLOYEES IN THE PERFORMANCE OF SPECIAL OR EMERGENCY SERVICES WHICH INCLUDE MEALS, LODGING AND THE NECESSARY OUT-OF- POCKET REIMBURSABLE EXPENDITURES INCURRED BY EMPLOYEES IN THE PERFORMANCE OF THEIR DUTIES. 16.6 CALCULATION OF CHARGES USING THE RATES SET FORTH IN EXHIBIT A. ALL RATES SET FORTH IN EXHIBIT A INCLUDE FUEL, LABOR BURDENS AND OVERHEADS. THE NUMBER OF HOURS/MILES USED IN CALCULATING THE CHARGES FOR SPECIAL SERVICES, EMERGENCY SERVICES, AND STANDBY EQUIPMENT WILL BEGIN WHEN EQUIPMENT AND PERSONNEL LEAVE THEIR HOME BASE LOCATION AND CONTINUE UNTIL THEIR RETURN TO THEIR HOME BASE. 17. FAIRFAX SHALL REIMBURSE HUTCHINSON FOR: (I) THE MONTHLY OPERATION AND MAINTENANCE FEE AND OTHER CHARGES AS PROVIDED IN SECTIONS 12 AND 1 6; AND (11) THE FEES AND EXPENSES FOR SPECIAL SERVICES AND EMERGENCY SERVICES AS PROVIDED IN SECTIONS 13, 14 AND 16, WITHIN 15 BUSINESS DAYS OF THE DATE OF AN INVOICES) REFLECTING THE AMOUNTS TO BE REIMBURSED. 17.1 IF PAYMENT FOR ANY OF THE INVOICED AMOUNTS AS PROVIDED IN THE PARAGRAPH ABOVE IS NOT MADE BY FAIRFAX WITHIN 15 BUSINESS DAYS OF THE DATE OF SUCH INVOICE(S), THE UNPAID BALANCE SHALL BEAR INTEREST FROM THE 1 5TH BUSINESS DAY AFTER THE BILLING DATE UNTIL PAID AT THE RATE OF 1 0% PER ANNUM, OR THE LEGALLY AUTHORIZED MAXIMUM INTEREST RATE, WHICHEVER IS LOWER. ALL COMPUTATIONS OF INTEREST SHALL BE MADE ON THE BASIS OF A YEAR OF 360 DAYS FOR THE ACTUAL NUMBER OF DAYS. 17.2 FAIRFAX MAY, WITHIN TWO CALENDAR YEARS FROM THE DATE OF ANY INVOICE, TAKE WRITTEN EXCEPTION TO ANY INVOICE, BILLING OR STATEMENT RENDERED BY HUTCHINSON FOR ANY AMOUNT CHARGED. FAIRFAX SHALL NEVERTHELESS PAY IN FULL WHEN DUE ALL INVOICES, BILLINGS OR STATEMENTS SUBMITTED BY HUTCHINSON FOR ALL COSTS INCURRED BY HUTCHINSON FOR WHICH FAIRFAX IS REQUIRED TO REIMBURSE HUTCHINSON AS PROVIDED IN THIS AGREEMENT. IF, HOWEVER, THE AMOUNT AS TO WHICH SUCH WRITTEN EXCEPTION IS TAKEN OR ANY PART THEREOF IS ULTIMATELY DETERMINED BY THE PARTIES NOT TO HAVE BEEN INCURRED IN ACCORDANCE WITH THIS AGREEMENT OR NOT TO HAVE BEEN A PROPER EXPENSE OR EXPENDITURE INCURRED IN GOOD FAITH WHEN MADE, SUCH AMOUNT OR Fairfax Interconnect Agreement 8 April 1, 2026 PORTION THEREOF (AS THE CASE MAY BE) SHALL BE REFUNDED BY HUTCHINSON TO FAIRFAX TOGETHER WITH INTEREST THEREON AT THE RATE OF INTEREST PER ANNUM AS DEFINED IN THE PRECEDING PARAGRAPH ABOVE FOR THE PERIOD FROM THE DATE OF PAYMENT BY FAIRFAX TO THE DATE OF REFUND BY HUTCHINSON. 18. HUTCHINSON WILL INSPECT, TEST, AND MAINTAIN THE METERING INSTRUMENTATION IN ACCORDANCE WITH HUTCHINSON'S OPERATING PROCEDURES, WHILE FAIRFAX WILL HAVE THE RIGHT TO WITNESS OR REQUEST INSPECTION AND TESTING RESULTS. FUTURE METER CALIBRATION REPORTS CAN BE PROVIDED TO FAIRFAX UPON REQUEST. HUTCHINSON SHALL GIVE FAIRFAX PRIOR NOTICE OF ALL SCHEDULED INSTRUMENTATION INSPECTIONS AND TESTING. FAIRFAX WILL ALSO HAVE THE RIGHT TO AUDIT THE RECORDS OF THE MEASUREMENT EQUIPMENT AT THE METERING FACILITIES. 19 ALL METERING OF GAS QUANTITIES DELIVERED AND SUBSEQUENT BILLING SHALL BE DONE BY HUTCHINSON USING EFM. FLOWING VOLUMES WILL BE CALCULATED IN ACCORDANCE WITH INDUSTRY STANDARDS AND ADJUSTED FOR TEMPERATURE AND PRESSURE (AT A PRESSURE BASE OF 14.73 PSIG AND A TEMPERATURE BASE OF 602 F). GAS QUALITY VALUES WILL BE PROVIDED AS DETERMINED BY HUTCHINSON AND WILL BE UTILIZED FOR PURPOSES OF CALCULATING FLOW PARAMETERS. 20. FAIRFAX SHALL BE RESPONSIBLE FOR ANY GAS LOST DUE TO THE FACILITIES IT OWNS. FAIRFAX WILL BE RESPONSIBLE FOR ALL LOSS AND DAMAGE TO HUTCHINSON'S PROPERTY WHICH RESULTS FROM THE NEGLIGENT ACTS OR OMISSIONS OF FAIRFAX OR ITS AGENTS, EMPLOYEES, REPRESENTATIVE OR CONTRACTORS IN THE DESIGN, CONSTRUCTION, OPERATION OR MAINTENANCE OF FAIRFAX'S FACILITIES. 21. HUTCHINSON SHALL BE RESPONSIBLE FOR ANY GAS LOST DUE TO THE FACILITIES IT OWNS. HUTCHINSON WILL BE RESPONSIBLE FOR ALL LOSS AND DAMAGE TO FAIRFAX'S PROPERTY WHICH RESULTS FROM THE NEGLIGENT ACTS OR OMISSIONS OF HUTCHINSON OR ITS AGENTS, EMPLOYEES, REPRESENTATIVES OR CONTRACTORS IN THE DESIGN, CONSTRUCTION, OPERATION OR MAINTENANCE OF HUTCHINSON'S FACILITIES. 22. IN THE EVENT OF HUTCHINSON OR FAIRFAX BEING RENDERED UNABLE, WHOLLY OR IN PART, BY FORCE MAJEURE TO CARRY OUT ITS OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT PAYMENT OF MONEY, IT IS AGREED UPON BY SUCH PARTY GIVING NOTICE AND REASONABLY Fairfax Interconnect Agreement 9 April 1, 2026 FULL PARTICULARS OF SUCH FORCE MAJEURE IN WRITING, EMAIL, FACSIMILE OR TELEPHONE FOLLOWED BY WRITTEN CONFIRMATION TO THE OTHER PARTY WITHIN A REASONABLE TIME AFTER THE OCCURRENCE OF THE CAUSE RELIED ON, THEN THE OBLIGATIONS OF THE PARTY GIVING SUCH NOTICE, SO FAR AS IT IS AFFECTED BY SUCH FORCE MAJEURE, SHALL BE SUSPENDED DURING THE CONTINUANCE OF ANY LIABILITY SO CAUSED, BUT FOR NO LONGER PERIOD, AND SUCH CAUSE SHALL SO FAR AS POSSIBLE BE REMEDIED WITH ALL REASONABLE DISPATCH. THE TERM "FORCE MAJEURE" AS USED HEREIN, SHALL MEAN ANY ACTS OF GOD, STRIKES, LOCKOUTS OR OTHER LABOR DISPUTES OR INDUSTRIAL DISTURBANCES, ACTS OF THE PUBLIC ENEMY, WARS, TERRORISM, BLOCKADES, INSURRECTIONS, RIOTS, EPIDEMICS, PANDEMICS, LANDSLIDES, LIGHTNING, EARTHQUAKES, FIRES, HURRICANES, TORNADOES, OTHER STORMS, FLOODS, WASHOUTS OR OTHER ACT OF NATURE, CIVIL DISTURBANCES, EXPLOSIONS, BREAKAGE, ACCIDENT OR REPAIRS TO MACHINERY OR LINES OF PIPE, TEMPORARY OR PERMANENT FAILURE OF GAS SUPPLY, INABILITY TO OBTAIN OR UNAVOIDABLE DELAY IN OBTAINING PIPE, MATERIALS OR OTHER EQUIPMENT, ACTS OR BINDING ORDERS OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY WHETHER OR NOT HAVING JURISDICTION, AND ANY OTHER CAUSE, WHETHER SIMILAR OR DISSIMILAR TO ANY ABOVE ENUMERATED, NOT REASONABLY WITHIN THE CONTROL OF THE PARTY CLAIMING RELIEF FROM LIABILITY AND WHICH SUCH PARTY WAS OR WOULD HAVE BEEN UNABLE TO PREVENT BY THE EXERCISE OF DUE DILIGENCE. FAILURE TO PREVENT OR SETTLE ANY STRIKE OR STRIKES OR ANY DISPUTE LEADING TO A LOCKOUT SHALL NOT BE CONSIDERED TO BE MATTER WITHIN THE CONTROL OF THE PARTY CLAIMING RELIEF. 23. FAIRFAX SHALL DEFEND, PROTECT, INDEMNIFY, AND HOLD HARMLESS HUTCHINSON, ITS MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ALL LIABILITY, CLAIMS, LIENS, COSTS, EXPENSES, DEMANDS, SUITS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER ARISING IN FAVOR OF ANY PERSON OR PARTY, INCLUDING THE PARTIES HERETO, AND THEIR EMPLOYEES AND REPRESENTATIVES, ON ACCOUNT OF PERSONAL INJURIES OR DEATH, OR DAMAGES TO PROPERTY (INCLUDING WITHOUT LIMITATION, CLAIMS FOR POLLUTION AND ENVIRONMENTAL DAMAGE) IN ANY WAY DIRECTLY RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OF FAIRFAX, ITS AGENTS, EMPLOYEES, REPRESENTATIVES OR CONTRACTORS. THIS INDEMNITY INCLUDES FAIRFAX'S AGREEMENT TO PAY ALL COSTS OF DEFENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES, INCURRED BY ANY PERSON OR PARTY INDEMNIFIED HEREIN. Fairfax Interconnect Agreement 10 April 1, 2026 24. EXCEPT AS PROVIDED IN SECTION 6, HUTCHINSON SHALL DEFEND, PROTECT, INDEMNIFY, AND HOLD HARMLESS FAIRFAX, ITS MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ALL LIABILITY, CLAIMS, LIENS, COSTS, EXPENSES, DEMANDS, SUITS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER ARISING IN FAVOR OF ANY PERSON OR PARTY, INCLUDING THE PARTIES HERETO, AND THEIR EMPLOYEES AND REPRESENTATIVES, ON ACCOUNT OF PERSONAL INJURIES OR DEATH, OR DAMAGES TO PROPERTY (INCLUDING WITHOUT LIMITATION, CLAIMS FOR POLLUTION AND ENVIRONMENTAL DAMAGE) IN ANY WAY DIRECTLY RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OF HUTCHINSON, ITS AGENTS, EMPLOYEES, REPRESENTATIVES OR CONTRACTORS. THIS INDEMNITY INCLUDES HUTCHINSON'S AGREEMENT TO PAY ALL COSTS OF DEFENSE, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES, INCURRED BY ANY PERSON OR PARTY INDEMNIFIED HEREIN. 25. FAIRFAX AGREES THAT THE OBLIGATIONS OF INDEMNIFICATION HEREUNDER INCLUDE, BUT WITHOUT LIMITATION, LIENS BY THIRD PERSONS AGAINST HUTCHINSON AND ITS PROPERTY BECAUSE OF LABOR, SERVICES, MATERIALS, OR ANY OTHER SUBJECT OF LIEN, FURNISHED TO FAIRFAX, ITS ASSIGNEES OR SUBCONTRACTORS, IN CONNECTION WITH THE WORK PERFORMED BY FAIRFAX HEREUNDER. 26. HUTCHINSON AGREES THAT THE OBLIGATIONS OF INDEMNIFICATION HEREUNDER INCLUDE, BUT WITHOUT LIMITATION, LIENS BY THIRD PERSONS AGAINST FAIRFAX AND ITS PROPERTY BECAUSE OF LABOR, SERVICES, MATERIALS, OR ANY OTHER SUBJECT OF LIEN, FURNISHED TO HUTCHINSON, ITS ASSIGNEES OR SUBCONTRACTORS, IN CONNECTION WITH THE WORK PERFORMED BY HUTCHINSON HEREUNDER. 27. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES OF ANY NATURE WHATSOEVER ARISING OUT OF OR RELATED TO ACTIONS TAKEN OR OMISSIONS OF SUCH PARTY IN CONNECTION WITH THIS AGREEMENT. 28. AT ALL TIMES DURING THIS AGREEMENT, EACH PARTY SHALL OBTAIN AND MAINTAIN THE FOLLOWING INSURANCE: (A) WORKER'S COMPENSATION INSURANCE FOR ALL OF ITS EMPLOYEES IN ACCORDANCE WITH THE STATUTORY REQUIREMENTS OF THE STATE OF MINNESOTA. FAIRFAX SHALL ALSO CARRY EMPLOYER'S LIABILITY COVERAGE WITH MINIMUM LIMITS AS FOLLOWS: Fairfax Interconnect Agreement 11 April 1, 2026 $500,000 ^-- BODILY INJURY BY DISEASE PER EMPLOYEE $500,000 - BODILY INJURY BY DISEASE AGGREGATE • $500,000 -- BODILY INJURY BY ACCIDENT (B) COMMERCIAL GENERAL LIABILITY INSURANCE IN A MINIMUM AMOUNT OF $ 1 ,500,000 PER OCCURRENCE; $2,000,000 ANNUAL AGGREGATE. (C) AUTOMOBILE LIABILITY INSURANCE COVERING OWNED, NON -OWNED, AND HIRED VEHICLES WITH MINIMUM COMBINED SINGLE LIABILITY LIMIT OF $ 1,000,000 PER OCCURRENCE. (D) EXCESS LIABILITY INSURANCE COVERAGE IN A MINIMUM AMOUNT OF $2,000,000. MAXIMUM LIABILITY IS LIMITED TO A COMBINED SINGLE LIMIT OF $ 1 ,500,000 BY MINNESOTA STATUTE. THE INSURANCE REQUIRED IN (B), (C) AND (D) SHALL REFLECT THAT THE OTHER PARTY IS AN ADDITIONAL INSURED. WITHIN THIRTY (30) DAYS OF EFFECTIVE DATE OF THIS AGREEMENT, EACH PARTY SHALL FURNISH TO THE OTHER PARTY CERTIFICATES AS EVIDENCE SHOWING THAT THE INSURANCE POLICIES TO BE CARRIED IN ACCORDANCE WITH THIS PROVISION HAVE BEEN OBTAINED. ALL INSURANCE TO BE CARRIED PURSUANT TO THE ABOVE SHALL BE ENDORSED TO REQUIRE THE INSURER TO FURNISH 30 DAYS' WRITTEN NOTICE PRIOR TO EFFECTIVE DATE OF ANY MODIFICATION OR CANCELLATION OF SUCH INSURANCE TO THE CERTIFICATE HOLDER. 29. DELIVERY OF NATURAL GAS VOLUMES TO THE FAIRFAX INTERCONNECT FACILITIES WILL BE MADE PURSUANT TO THE NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT (THE "TRANSPORTATION AGREEMENT") EXECUTED BETWEEN HUTCHINSON AND NEW ULM. SHOULD ANY CONFLICT ARISE BETWEEN ANY PROVISION OF THIS INTERCONNECT AGREEMENT AND THAT OF TRANSPORTATION AGREEMENT, THE PROVISIONS OF HUTCHINSON'S TRANSPORTATION AGREEMENTS SHALL CONTROL. 30. HUTCHINSON SHALL HAVE THE RIGHT TO INSPECT AND AUDIT ALL BOOKS, RECORDS OR ANY OTHER SUPPORTING EVIDENCE OF FAIRFAX THAT HUTCHINSON DEEMS NECESSARY IN ORDER TO DETERMINE FAIRFAX'S COMPLIANCE WITH THIS AGREEMENT, HUTCHINSON POLICIES AND PROCEDURES, REGULATORY AUTHORITIES OR OTHER Fairfax Interconnect Agreement 12 April 1, 2026 LAWS AND REGULATIONS. HUTCHINSON SHALL HAVE THE RIGHT TO RECEIVE COPIES OF ANY SUCH DOCUMENTATION REQUESTED. HUTCHINSON'S RIGHT TO AUDIT SHALL EXTEND THROUGHOUT THE TERM OF THIS AGREEMENT AND FOR A PERIOD OF THREE YEARS THEREAFTER, OR LONGER IF REQUIRED BY LAW. 31. THIS AGREEMENT SHALL NOT BE ASSIGNED OR TRANSFERRED BY EITHER PARTY IN ANY MANNER, BY OPERATION OF LAW OR OTHERWISE, WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED; PROVIDED HOWEVER, EITHER PARTY MAY WITHOUT THE NEED FOR CONSENT FROM THE OTHER PARTY (AND WITHOUT RELIEVING THE ASSIGNING PARTY FROM LIABILITY HEREUNDER) TRANSFER OR ASSIGN ITS RIGHTS AND OBLIGATIONS HEREUNDER TO ANY PARENT, AFFILIATE OR SUBSIDIARY OF SUCH PARTY; PROVIDED, HOWEVER, THAT IN EACH SUCH CASE ANY SUCH ASSIGNEE SHALL AGREE IN WRITING TO BE BOUND BY THE TERMS AND CONDITIONS HEREOF. SUBJECT THERETO, THIS AGREEMENT SHALL INURE TO THE BENEFIT OF; AND BE BINDING UPON, THE SUCCESSORS, ASSIGNS, AND LEGAL REPRESENTATIVES OF THE RESPECTIVE PARTIES. 32. THIS AGREEMENT SHALL RUN CONCURRENTLY WITH THE NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT ENTERED INTO BY HUTCHINSON AND NEW ULM. IN THE EVENT THE NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT IS TERMINATED, THIS AGREEMENT SHALL AUTOMATICALLY BE TERMINATED; IN THE EVENT THE NATURAL GAS FIRM TRANSPORTATION CAPACITY AGREEMENT IS EXTENDED BEYOND ITS INITIAL TERM, THIS AGREEMENT SHALL BE AUTOMATICALLY EXTENDED FOR THE IDENTICAL EXTENDED TERM. THIS PROVISION SHALL NOT PREVENT THE PARTIES FROM ENTERING INTO A NEW, EXTENDED, OR AMENDED INTERCONNECT AGREEMENT TO REPLACE THIS AGREEMENT, PROVIDED THAT SUCH NEW, EXTENDED, OR AMENDED AGREEMENT IS IN WRITING, SPECIFICALLY PROVIDES THAT IT IS A MODIFICATION OF THIS AGREEMENT, AND IS EXECUTED BY BOTH PARTIES. Fairfax Interconnect Agreement 13 April 1, 2026 IN WITNESS WHEREOF, FAIRFAX AND HUTCHINSON HAVE EXECUTED THIS AGREEMENT IN TWO (2) DUPLICATE ORIGINALS, EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE. HUTCHINSON UTILITIES COMMISSION M. NAME: TITLE:- COMMISSION PRESIDENT DATE: WITNESS: DATE: M. M. TITLE: DATE: WITNESS* DATE: Fairfax Interconnect Agreement 14 April 1, 2026 EXHIBIT A HUTCHINSON UTILITIES COMMISSON 2026 EQUIPMENT RATES EQUIPMENT RATE PER HOUR PICKUP $47.00 BACKHOE $80.00 WELDER $52.00 AIR COMPRESSOR $42.00 *NOTE: ALL EQUIPMENT RENTED OR 3RD PARTY CONTRACTOR HIRED BY HUTCHINSON UTILITIES COMMISSION WILL BE INVOICED AT ACTUAL COST PLUS `I 5% FOR BILLING AND HANDLING. HUTCHINSON UTILITIES COMMISSON 2026 AVERAGE HOURLY RATES CLASSIFICATION REGULAR OVERTIME OPERATOR $70.00 $ 1 00.00 'NOTE: ALL AVERAGE BILLABLE HOURLY RATES MAYBE ADJUSTED ANNUALLY PURSUANT TO HUTCHINSON'S LABOR AGREEMENT AND BENEFIT COSTS. Fairfax. Interconnect Agreement 15 April 1, 2026 HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: Approve Sterling Energy LLC Contract 1st Amendment Presenter: Mike Gabrielson Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: HUC is requesting the commission approve an amendment to the original agreement entered into between HUC and Sterling Energy. This 1 st Amendment states Sterling Energy agrees to Remove 1968 Worthington Unit #3, 1968 Worthington Unit #4 and the 1971 GE Combined Cycle STAG Unit #8 from HUC's Facility no later than December 31 st, 2026. Any Generating Set and Auxiliary Equipment still left on the premise as of December 31st, 2026 will resort back in rights, title and possession to HUC. BOARD ACTION REQUESTED: Approve Sterling Energy LLC Contract 1st Amendment Fiscal Impact: $0 Included in current budget: No Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: ,�ySCwIN��H Hutchinson Utilities Commission 1 ST AMENDMENT TO EQUIPMENT REMOVAL AGREEMENT 1 . THIS AMENDMENT (THE "AMENDMENT") IS MADE AND ENTERED INTO THIS 25TH DAY OF MARCH, 2026 BY STERLING ENERGY, LLC ("STERLING"), LOCATED AT 532 CONNECTICUT ST, GARY, INDIANA, 46402 AND HUTCHINSON UTILITIES COMMISSION ("HUC") A MINNESOTA MUNICIPAL UTILITY LOCATED AT 225 MICHIGAN ST SE, HUTCHINSON, MINNESOTA, 55350, PARTIES TO THE AGREEMENT DATED AUGUST 10, 2022. 2. THE AGREEMENT IS AMENDED AS FOLLOWS: EFFECTIVE MARCH 25TH, 2026 STERLING AGREES TO REMOVE A 1968 WORTHINGTON GENERATING SET (UNIT #8), A 1968 WORTHINGTON GENERATING SET (UNIT #4) AND THE 1971 GE COMBINED CYCLE STAG UNIT (UNIT #8) FROM HUC'S FACILITY NO LATER THAN DECEMBER S 1ST, 2®26. ANY GENERATING SET AND AUXILIARY EQUIPMENT STILL ON THE PREMISE AS OF DECEMBER 31 ST, 2026 WILL RESORT BACK IN RIGHTS, TITLE AND POSSESSION TO HUC. EXCEPT AS SET FORTH IN THIS AMENDMENT, THE AGREEMENT IS UNAFFECTED AND SHALL CONTINUE IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS AND CONDITIONS. IN THE EVENT THERE IS A CONFLICT BETWEEN THIS AMENDMENT AND THE AGREEMENT, THE TERMS OF THIS AMENDMENT SHALL PREVAIL. THIS AMENDMENT SETS FORTH ALL TERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL AMENDMENTS SHALL BE BINDING. THIS AMENDMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES. HUTCHINSON UTILITIES COMMISSION BY: NAME: TITLE: DATE: WITNESS: TITLE: DATE: STERLING ENERGY LLC f NAME: William J. Harrington TITLE: President DATE: March 27, 2026 Equipment Removal Agreement This agreement is entered into between Sterling Energy, LLC ("the contractor") and the Hutchinson Utilities Commission ("HUC") as of the last date below written. The purpose of this agreement is to state the terms and conditions by which the contractor will be removing and taking possession of equipment of HUC namely, a 1968 Worthington generating set from HUC plant #3, a 1968 Worthington generating set from HUC plant #4, and the 1971 GE combined cycle stag unit from HUC plant #8 along with all apparatus connected to those respective units. Pursuant to this agreement the parties shall have the following rights and responsibilities: Rights and responsibilities of the contractor: 1. The contractor shall pay RUC $2500 and upon payment, the contractor shall obtain all right, title and possession of the above enumerated equipment and apparatus. 2. The contractor shall have in full force and effect a policy of general liability insurance in an amount of not less than $1.5 million and other such insurance coverage such as worker's compensation, motor vehicle liability and other insurance and in amounts as is typical for a project of this scope. It is also the responsibility of the contractor to insure the equipment against damage as coverage will no longer be provided by HUC. 3. The contractor shall furnish the labor and materials for the equipment removal and the equipment will be removed from HUC's facilities in a professional manner with minimal disruption to HUC's day-to-day activities at those locations. Contractor shall be responsible for any damage to buildings especially to overhead cranes and hoists. 4. Should the generating sets be removed as complete units, the contractor shall be responsible for the cost of alteration of building entrances to accomplish this. 5. The contractor is taking the equipment and apparatus in an "as is" "where is" condition. HUC s : ecifically disclaims all express and n died warranties of merchantabiliti and fitness for a i!articular 11urgose� Rights and responsibilities of HUC: 1. HUC shall obtain and pay for any and all building permits required by the City of Hutchinson. 2. Should building alterations be required to allow contractor to remove complete generating sets, HUC shall pay the cost of the engineering and plans for such building alterations. 3. HUC shall grant access to the buildings and grounds at all reasonable times in order for the work to proceed in a timely manner. 4. Except for what is contained in the equipment, HUC shall be responsible for proper containment and disposal of oils or other lubricants which may be present as part of the equipment removal. 5. HUC shall be responsible for any repair of the foundation/floor of the respective plants after the equipment is removed. Sterling Energy, LLC It's: President Dated: July 29, 2022 Hutchinson Utilities Commission 4� By - President Dated:"..� HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: 2025 Annual Reliability Benchmarking Report Presenter: Dave Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The American Public Power Association 2025 Annual Reliability Benchmarking Report. This report provides Hutchinson Utilities with high -quality reliability benchmarking information. This year's report includes our data in comparison to the 121 utilities in our region that provided and verified their data for 2025. This report focuses on distribution system reliability across the country and is customized to each utility that participates in the American Public Power Association's PowerTRX Reliability. APPA created the PowerTRX Reliability Annual Report to assist utilities in their efforts to understand and analyze their electric system. Attachments: 2025 Reliability Benchmarking Report 2025 HUC outage Pie Chart APPA Recognition for exceptional electric reliability in 2025 SAIDI, SAIFI, CAIDI Summary BOARD ACTION REQUESTED: None Fiscal Impact: None Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: Hutchinson Utilities Commission AME I AN PUBLIC ASSOCIATION . Poweing Strong Communities I. About This Report This report focuses on distribution system reliability across the country and is customized to each utility that participates in the American Public Power Association's PowerTRX Reliability powered by ESAMS. APPA created the Annual Reliability Benchmarking Report to assist utilities in their efforts to understand and analyze their electric system. In 2012, APPA developed the eReliability Tracker thanks to a grant from the Demonstration of Energy & Efficiency Developments (DEED) program. In 2025, APPA transitioned the eReliability Tracker to a new platform PowerTRX Reliability powered by ESAMS by paternering with HGW & Associates, Inc. This report reflects data in the PowerTRX Reliability from January 1, 2025 to December 31, 2025. This analysis might not properly reflect your utility's statistics if you do not have a full year of data in the system. The report includes data recorded as of March 23, 2026. Reliability reflects both historic and ongoing engineering investment decisions within a utility. Proper use of reliability metrics ensures that a utility is performing its intended function and is providing service in a consistent and effective manner. While the primary use of reliability statistics is for self -evaluation, you can use these statistics to compare your utility with similar utilities. However, differences such as electrical network configuration, ambient environment, weather conditions, and number of customers served typically limit most utility -to -utility comparisons. Due to the diverse range of utilities that use the PowerTRX Reliability, this report endeavors to improve comparative analyses by grouping utilities by size and region. Since this report contains data for all utilities that use the PowerTRX Reliability, it is important to consider how a particularly large or small utility can affect comparative benchmarks. To ease the issues associated with comparability, each utility's reliability statistics are weighted based on customer count when aggregated. This means that all utilities are equally weighted, and all individual statistics are developed on a per customer basis. The aggregate statistics in this report are calculated from the 312 utilities with verified 2025 outage data. Utilities that experienced no outages in 2025, or did not upload any data, will have NULL, None, or "0" values in their report for utility -specific data and were not included in the aggregate analysis. Also note that log -normal data with a z-scorell] greater than 3.25 may be excluded if it significantly distorts the aggregate statistics. [1]: A z-score indicates how much a data point differs from the mean. For instance, a z-score of 3.25 indicates that the data point is three and one -quarter standard deviations from the mean. A z-score of 0 indicates that the data point is identical to the mean. Utility Classifications This report separates utilities into groups according to geographic region and the number of customers served. Table 1 shows the range of customer counts for utilities that use the PowerTRX Reliability by five distinct groups of approximately 111 utilities per group. Your utility is in size class 4 and region 3. Table 1. Customer count range per size class ................................................................................................................................................................. ................................................................................................................................................................. Customer Count Range Class 1 >0 ................................................................................................................................................................. Class 2 ................................................................................................................................................................. >1,511 Class 3 ................................................................................................................................................................. >3,518 Class 4 >7,262 ...5............................................>.1.4, ...Class 547......................................... Each utility is also grouped with all other participating utilities within their region. Figure 1 shows the number of utilities using the PowerTRX Reliability in each region and Figure 2 shows the states and territories included in each region. Figure 1. Number of utilities subscribed to the PowerTRX Reliability by region 140 120 1100 D - 80 0 .0 60 E 3 40 20 5 Regionis Figure 2. Regions "9R 48 AMERICAN GUAM NORTHERN PUERTO U.S. VIRGIN SAMOA MARIANA RICO ISLANDS ISLANDS II. IEEE Statistics When it comes to reliability, the industry standard metrics are defined in the Institute for Electrical and Electronics Engineers' Guide for Electric Power Distribution Reliability Indices, or IEEE 1366 guidelines. For each utility, the PowerTRX Reliability performs IEEE 1366 calculations for System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), Customer Average Interruption Duration Index (CAIDI), Momentary Average Interruption Frequency Index (MAIFI), and Average Service Availability Index (ASAI). It is important to note how major events (MEs) are calculated and used in this report. An example of an ME includes severe weather, such as a tornado or hurricane, that leads to unusually long outages in comparison to your distribution system's typical outage. This report uses the APPA ME threshold, which is based directly on the SAIDI for specific outage events, rather than a daily SAIDI. The APPA ME threshold allows a utility to remove outages that exceed the IEEE 2.5 beta threshold for outage events, which considers up to 10 years of the utility's outage history. In the PowerTRX Reliability, if a utility does not have at least 36 outage events prior to the year being analyzed, then no threshold is calculated. If this is the case for your utility, then you will have a NULL value in the following field and the calculations without MEs in the SAIDI, SAIFI, CAIDI, and ASAI sections of this report will be the same as the calculations with MEs for your utility. More outage history will provide a better threshold for your utility. Your utility's APPA major event threshold is 81.9 minutes. For each of the reliability indices, this report displays your utility's metrics alongside the mean values for all utilities using the PowerTRX Reliability and within the same class and region as your utility. The first table within each of the following subsections allows you to better understand the performance of your electric system relative to other utilities nationwide and to those within your same region or size class. The second table breaks down the national data into quartile ranges, a minimum value, and a maximum value. All indices, except MAIFI, are calculated for outages with and without MEs. Furthermore, the tables show indices for scheduled and unscheduled outages. Note that scheduled and unscheduled calculations include MEs. Also note that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system. II.1. System Average Interruption Duration Index SAIDI is the average duration (in minutes) of an interruption per customer served by the utility during a specific time frame. Since SAIDI is a sustained interruption index, only outages lasting longer than five minutes are included in the calculations. SAIDI is calculated by dividing the sum of all customer minutes of interruption[21 within the specified time frame by the average number of customers served during that period. For example, a utility with 100 customer minutes of interruption and 100 customers would have a SAIDI of 1. Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system. Table 2. Average SAIDI with and without MEs In minutes .................................................................................................................................................................................................................................................................................................................................................................................................................... All No MEs Unscheduled Scheduled .................................................................................................................................................................................................................................................................................................................................................................................................................... Your utility 10.57 .................................................................................................................................................................................................................................................................................................................................................................................................................... 10.57 8.81 1.7 Utilities that use PowerTRX Reliability 110.25 54.6 106.69 6.51 .................................................................................................................................................................................................................................................................................................................................................................................................................... Utilities in your region 67.08 46.73 65.28 3.0 ...class ..........................................................................79.94...............30.48............................................74 ..size ...i.n.........your Utilities .25....................................8..53. Table 3. Summary SAIDI data from the PowerTRX Reliability In minutes All ..........INo MEs .L.Unscheduled .L..Scheduled Minimum ........................................................................................................................................................................................................................................................................................ 0.04 0.04 0.04 <0.01 First Quartile 20.91 12.73 19.08 0.2 ........................................................................................................................................................................................................................................................................................ Median 50.24 25.79 48.17 1.01 ........................................................................................................................................................................................................................................................................................ Third Quartile 111.47 54.03 108.6 4.63 Maximum 965.21 760.33 948.5 280.35 [2]: Customer minutes of interruption is calculated by multiplying total customers interrupted and total minutes of interruption. Figure 3. Average SAIDI by region -�� 200 E 150 V) 100 no ll 50 IRegionis II.2. System Average Interruption Frequency Index SAIFI is the average instances a customer on the utility system will experience a sustained interruption during a specific time frame. Since SAIFI is a sustained interruption index, only outages lasting longer than five minutes are included in the calculations. SAIFI is calculated by dividing the total number of customers that experienced sustained interruptions by the average number of customers served during that period. For example, a utility with 150 customer interruptions and 200 customers would have a SAIFI of 0.75. Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system. Table 4. Average SAIFI with and without MEs In interruptions ................................................................................................................................................................................................................................................................................................................................................................................................ All No MEs Unscheduled Scheduled ........................................................................................................................................................................................................................................................................................................................................................................................................ Your utility ........................................................................................................................................................................................................................................................................................................................................................................................................ 0.93 0.93 0.9 0.03 Utilities that use PowerTRX Reliability 0.86 0.54 0.83 0.04 ........................................................................................................................................................................................................................................................................................................................................................................................................ Utilities in your region 0.68 0.45 0.66 0.02 .....................................................................6 ..size ...class ...i.n.........your Utilities 0.4 0.61 0.03 Table 5. Summary SAIFI data from the PowerTRX Reliability In interruptions All No...M.E s.l.. Unscheduled nsche duledL...................................................... Scheduled Minimum .................................................................................................................................................................................................................................................................................. <0.01 <0.01 <0.01 <0.01 First Quartile 0.28 0.15 0.27 <0.01 .................................................................................................................................................................................................................................................................................. Median 0.61 0.35 0.56 0.01 .................................................................................................................................................................................................................................................................................. Third Quartile 1.12 0.71 1.09 0.05 Maximum 4.68 4.16 4.67 0.63 Figure 4. Average SAIR by region 1.6 U) O1.4 ; CL 1.2 1.0 0.8 Uj 0.6 0.4 0.2 0.0 IRegions II.3. Customer Average Interruption Duration Index CAIDI is the average duration (in minutes) of an interruption experienced by customers during a specific time frame. Since CAIDI is a sustained interruption index, only outages lasting longer than five minutes are included in the calculations. CAIDI is calculated by dividing the sum of all customer minutes of interruption by the number of customers that experienced one or more interruptions during that period. This metric reflects the average customer experience (minutes of duration) during an outage. Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system. Table 6. Average CAIDI with and without MEs In minutes ALL.............N.o...MEs ....Unscheduled .................................................... Scheduled Your utility .................................................................................................................................................................................................................................................................................................................................................................................................................... 11.4 11.4 9.81 60.05 Utilities that use PowerTRX Reliability 114.78 94.95 113.99 161.38 .................................................................................................................................................................................................................................................................................................................................................................................................................... Utilities in your region 100.36 89.45 101.31 187.25 ...class ...i.n.........your .size Utilities 112.33 89.04 108.33 139.02 Table 7. Summary CAIDI data from the PowerTRX Reliability In minutes All ..........l..No...MEs Unscheduled .L...................................................... Scheduled Minimum ........................................................................................................................................................................................................................................................................................ 11.4 11.4 9.81 10.0 First Quartile 60.95 55.27 60.95 60.0 ........................................................................................................................................................................................................................................................................................ Median 93.37 78.01 91.69 91.21 ........................................................................................................................................................................................................................................................................................ Third Quartile 134.84 108.01 135.38 155.92 Maximum 834.46 577.44 842.31 4,453.93 Figure 5. Average CAIDI by region -�� 200 E 150 U 100 50 IRegionis II.4. Momentary Average Interruption Frequency Index MAIFI is the average number of momentary interruptions a utility customer will experience during a specific time frame. In this report, an outage with a duration of five minutes or less is classified as momentary. MAIFI is calculated by dividing the total number of customers that experienced momentary interruptions by the total number of customers served by the utility. For example, a utility with 20 momentary customer interruptions and 100 customers would have a MAIFI of 0.20. Momentary interruptions can be more difficult to track and utilities without an automated outage management system might not log these interruptions; therefore, some utilities have a MAIFI of zero. Table 8. Average MAIFI In interruptions ..................................................................................................................................................................................................................................... All ..................................................................................................................................................................................................................................... Your utility ..................................................................................................................................................................................................................................... NULL Utilities that use PowerTRX Reliability 0.44 ..................................................................................................................................................................................................................................... Utilities in your region 0.8 ..........................................................................0..3.9. ...i.n...your size ...class Utilities Table 9. Summary MAIFI data from the PowerTRX Reliability In interruptions All ......................................................................................................... Minimum ......................................................................................................... <0.01 First Quartile <0.01 ......................................................................................................... Median 0.16 ......................................................................................................... Third Quartile ..............................3..8.2. 0.51 aximum Maximum Figure 6. Average MAIR by region 0.8 LO rz o 0.7 ci 0.6 0.5 0.4 0.3 0)0.2 Clo a) 0.1 0.0 IRegions U.S. Average Service Availability Index ASAI is the percentage of time the sub -transmission and distribution systems are available to serve customers during a specific time frame. This load -based index represents the percentage availability of electric service to customers within the period analyzed. It is calculated by dividing the total hours in which service is available to customers by the total hours that service is demanded by the customers. For example, an ASAI of 99.99% means that electric service was available for 99.99% of the time during the given period. Note that the higher your ASAI value, the better the performance. In the tables below, scheduled and unscheduled calculations include MEs. Also note that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system. Table 10. Average ASAI with and without MEs In percentage .......................................................................................................................................................................................................................................................................................................................................................................................................................... All No MEs Unscheduled Scheduled .......................................................................................................................................................................................................................................................................................................................................................................................................................... Your utility 99.9979 .......................................................................................................................................................................................................................................................................................................................................................................................................................... 99.9979 99.9983 99.999 Utilities that use PowerTRX Reliability 99.9792 99.9897 99.9798 99.9987 .......................................................................................................................................................................................................................................................................................................................................................................................................................... Utilities in your region 99.9872 99.9911 99.9876 99.9994 ...i.n.........your ...class Utilities size 99 99.985.9..................99..9.983. Table 11. Summary ASAI data from the PowerTRX Reliability In percentage ............................................................................................................................................................................................................................................................................................... All No MEs Unscheduled Scheduled ............................................................................................................................................................................................................................................................................................... Maximum ............................................................................................................................................................................................................................................................................................... 99.9999 99.9999 99.9999 99.9999 First Quartile 99.996 99.9975 99.9963 99.9999 ............................................................................................................................................................................................................................................................................................... Median * 9906 99.9951 99.9908 99.9998 ............................................................................................................................................................................................................................................................................................... Third Quartile 199 99.9792 99.9899 99.9795 99.9991 Minimum inimum 99.8163 98.1..63....99.8553.................................99..81..9.5..................99.9466. Figure 7. Average ASAI by region 100.000 (V 99.975 0) 99.950 U 99.925 99.900 99.375 cu 99.850 99.325 99.500 Regions II.6. Energy Information Administration Form 861 Data Form EIA-861 collects annual information on electric power industry participants involved in the generation, transmission, distribution, and sale of electric energy in the United States and its territories. In 2014, Energy Information Administration (EIA) began publishing reliability statistics in Form EIA-861; therefore, APPA included these statistics in this report for informational purposes. Please note that the following data includes 171 investor -owned, 467 rural cooperative, and 332 public power utilities that were large enough to be required to fill out the full EIA-861 form. The statistics do not include data from utilities that complete the EIA 861-S form, which smaller entities complete. Note that the 332 participating public power utilities include entities classified by EIA as municipal, political subdivision, and state. In addition, since the collection and release of EIA form data lags by a year, the data is based on 2024 data that was published October 7, 2025. Therefore, we suggest you only use the aggregate statistics contained herein as an informational tool for further comparison of reliability statistics. In Form EIA-861, an entity provides SAIDI and SAIFI including and excluding ME days in accordance with the IEEE 1366-2003 or IEEE 1366-2012 standard. Although EIA collected other reliability -related data, the tables below only include SAIDI and SAIFI data including and excluding ME days. You can download the full set of data at: www.eia.gov/electricity/data/eia861 /. Table 12. Your utility's SAIDI and SAIFI with and without IEEE ME days ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... SAIDI with IEEE ME SAIDI without IEEE SAIFI with IEEE ME days SAIFI without IEEE ME days (minutes) ME days (minutes) (interruptions) days (interruptions) Table 13. Summary SAIDI data from Form EIA-861, 2024 In minutes Maximum .......................� 1...7. 3..1...3...0.0...0 17,059.00 Table 14. Summary SAIFI data from Form EIA-861, 2024 In interruptions All No MEs Average ................................................................................................................................................... 1.75 1.24 Minimum 0 0 ................................................................................................................................................... First Quartile 0.84 0.64 Median 1.41 1.02 ................................................................................................................................................... Third Quartile 110.41 2.26 1.61 Maximum aximum 6.86 III. Outage Causes Equipment failure, extreme weather events, wildlife, and vegetation are some of the most common causes of electric system outages. The following pie chart shows the percentages of the primary causes of outages for all utilities using the PowerTRX Reliability in 2025. Vegetation Q Scheduled Figure 8. Primary causes of outages in 2025 nt Utility Human Error Power Supply Public uled (Unknown and (Natural) Certain factors, such as regional weather and animal/vegetation patterns, can make some causes more prevalent for a specific group of utilities. The following section includes graphs depicting common causes of outages for your utility, all utilities in your region, and all utilities using the PowerTRX Reliability. Charts containing aggregate information are customer -weighted to account for differences in utility size for a better analytical comparison. For example, a particularly large utility may have a large number of outages compared to a small utility. To avoid skewing the data toward large utilities, the number of cause occurrences is divided by customer size to account for the differences. In Figures 9 to 14, the data represent the number of occurrences for each group of 1,000 customers. A customer -weighted occurrence rate of "1" means an average of one outage from that cause occurred per 1,000 customers in 2025. Note that the sustained outage cause analysis is more comprehensive than the momentary outage cause analysis due to a larger and more robust sample size for sustained outages. Regardless, tracking both sustained and momentary outages helps utilities understand and reduce outages. To successfully use the outage information tracked by your utility, it is imperative to classify and record outages in detail. The more information provided per outage, the more conclusive and practical your analyses will be. III.1. Sustained Outage Causes In general, sustained outages are the most commonly tracked outage type. In analyses of sustained outages, utilities tend to exclude scheduled outages, partial power, customer - related problems, and qualifying major events from their reliability indices calculations. While this is a valid method for reporting, these outages should be included for internal review to make utility -level decisions. In this section, we evaluate common causes of sustained outages for your utility, corresponding region, and for all utilities that use PowerTRX Reliability powered by ESAMS. It is important to note that sustained outages are classified in this report as outages that last longer than five minutes, as defined by IEEE 1366. Figure 9. Top five causes of sustained outages for all utilities that use the PowerTRX Reliability[31 3.0 O 0 2.5 L Q 2.© n V u 1.5 G N 1.0 U U O 0.5 0.0 Outage Cause Types Figure 10. Top five causes of sustained outages for your utility[41 0.25 i? O 0.20 L Q� 0.15 0.10 L U U Q 0.05 0.00 Outage Cause Types [3]: Cause occurrence rates reflect the total number of outages across all participating utilities. In some cases, a high occurrence rate for a specific cause may be driven primarily by a small number of utilities (or a single utility) that experienced a large number of outages for that cause during the reporting period. [4]: The number of occurrences for each cause is divided by the utility's customer count (in thousands) to create an occurrence rate that can be compared across different utility sizes. Figure 11. Top five causes of sustained outages in your region 4.0 3.5 O 3.0 W 2.5 P-� (V 2.0 (V 1.5 U 1.0 U 0 0.5 0.0 Outage Cause Types III.2. Momentary Outage Causes The ability to track momentary outages can be difficult or unavailable on some systems, but due to the hazard they pose for electronic equipment, it is important to track and analyze the causes of momentary outages. This section evaluates the common causes of momentary outages for your utility, region, and size class as well as common causes for all utilities that use the PowerTRX Reliability. Please note that only outages lasting less than five minutes are classified as momentary, as defined by IEEE 1366. In Figures 12-14, for each utility, the number of occurrences for each cause is divided by that utility's customer count (in thousands) to create an occurrence rate that can be compared across different utility sizes. Figure 12. Top five causes of momentary outages for all utilities that use the PowerTRX Reliability 1.75 a 1.50 i 1.25 CL aL V 1.00 U G N 0.75 i U 0.50 U G 0.25 0.00 Outage Cause Types Figure 13. Top five causes of momentary outages for your utility 0.04 0 0 0.02 W a pJ 0.00 0.000 0.000 0.000 0.000 0.000 c w s —0.02 U U 0 —0.04 Name None None Name Name Outage Cause Types Figure 14. Top five causes of momentary outages in your region 2.17 2.0- 1.5 C - U 1.0- U 0.50 U 0.5- 0 0.31 0.27 0.22 0.0- Unknown Utility Maintenance and Repairs Direct Stroke Electricall Failure Scheduled Outage Cause Types Thank you for your active participation in the PowerTRX Reliability service. We hope this report is useful to your utility in analyzing your system. If you have any questions regarding the material provided in this report, please contact: APPA's Reliability Team o erT u lic o eror For more information on reliability, visit httpE//www.p u lic o eror /relic flit -tracking. Copyright 2026 by the American Public Power Association. All rights reserved. co El 12 CD co co co m co co co 0 CD on rb uj 4� 4� c un 2 A A 0 § o 0 � 7 § v co / ch x e = _ E 2 \ @ U U) f E 2 / \ / O $ E \ 2 . Z m 00 O� Iq O O HUTCHINSON UTILITIES COMMISSION RECOGNIZED FOR RELIABLE ELECTRIC SERVICE TO THE COMMUNITY Hutchinson MN 2026 — Hutchinson Utilities Commission has received national recognition for achieving exceptional electric reliability in 2025. The recognition comes from the American Public Power Association (APPA), a trade group that represents more than 2,000 not -for -profit, community -owned electric utilities. APPA helps electric utilities track power outage and restoration data through its subscription -based PowerTRX Reliability service. Once per year, APPA's Reliability Team compares this data to national statistics tracked by the U.S. Energy Information Administration for all types of electric utilities. "I am continually inspired by the unwavering commitment of public power utilities to delivering reliable service to their communities," said Adrienne Lotto, Senior Vice President of Grid Security, Operations, and Technical Services. "The utilities honored here have set the standard for excellence and dedication, ensuring that families and businesses can count on their local power providers every day. Congratulations to these outstanding teams for earning this well -deserved recognition and for making a positive difference where it matters most." Nationwide, the average public power customer has their lights out for less than half the amount of time that customers of other types of utilities do. "We are proud to receive this recognition. It is a testament to the hard work of all our staff to ensure that we keep Hutchinson powered," said Jeremy Carter, General Manager at Hutchinson Utilities Commission. For more information on Hutchinson Utilities Commission and its commitment to reliability, visit https://www.hutchinsonutilities.com/ HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: 2025 Safety Award of Excellence Presenter: Dave Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Hutchinson Utilities Commission has earned the American Public Power Association's Safety Award of Excellence for safe operating practices in 2025. Hutchinson Utilities received the Diamond (Top) designation. Attachments: Safety Award Press Release BOARD ACTION REQUESTED: None Fiscal Impact: Included in current budget: No Budget Change: No PROJECT SECTION: Total Project Cost: Remaining Cost: HUTCHINSON UTILITIES COMMISSION HONORED WITH NATIONAL AWARD FOR OUTSTANDING SAFETY PRACTICES WASHINGTON, D.C., March 30, 2026 — Hutchinson Utilities Commission has earned the American Public Power Association's Safety Award of Excellence for safe operating practices in 2025. The utility earned Diamond award in the category for utilities with 60,000 — 109,000 worker -hours of annual worker exposure. More than 240 utilities entered the annual Safety Awards for 2025. The entrants are placed in accordance with their number of worker -hours and ranked based on the most incident -free records and overall state of their safety programs and culture during 2025. The incidence rate is based on the number of work -related reportable injuries or illnesses and the number of worker -hours during 2025, as defined by the Occupational Safety and Health Administration (OSHA). Hutchinson Utilities Commission is proud of our safety culture," said Jeremy Carter, General Manager of Hutchinson Utilities Commission. "This award is a testament the hard work that has gone into building this culture and ensuring that our team members have a safe work environment." "In Public Power, safety excellence isn't achieved by chance. It's earned through unwavering discipline, strong leadership, and a culture where every team member looks out for one another," said Jon Beasley, Chair of APPA's Safety Committee and Vice - President of Electric Cities of GA. "These Safety Award recipients stand as proof that commitment and consistency save lives, strengthen communities, and set the benchmark for our entire industry," APPA has conducted the Safety Awards annually for more than sixty-eight years. APPA is the voice of not -for -profit, community -owned utilities that power 2,000 towns and cities nationwide. HUTCHINSON UTILITIES COMMISSION ^I'�xP61Tti'°" Board Action Form Agenda Item: Award Contract for Plant #1 Substation 47MVA Transformer Presenter: Dan L. Agenda Item Type: Time Requested (Minutes): 10 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: On April 15th HUC held a bid opening for a 115/13.8kV 47MVA transformer for the Plant #1 Substation 115kV rebuild project. Four bids were received. After reviewing the bid proposals staff and DGR Engineering are recommending awarding the contract to Prolec-GE Waukesha for a total contract price of $2,505,351.00. Please see the attached bid tabulation sheet for the bid results. Attachments: XFMR Bid Summary DGR Engineering Letter of Recommendation April 2026 BOARD ACTION REQUESTED: Award contract for Plant #1 Substation 47MVA Transformer to Prolec-GE Waukesha. Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: LL W W 7 N .O rU� V ��+ •. �.J � O cV16 'a �' p N M z A O' N o O N N R C. O .. O O O O 'y4 R C. 7 G1 Vl O rq N O Vl •� �n i O oo l 01 00 7 i � 69 69 69 69 69 69 69 WEf-3 O O O O O O O O O O O O O O O O O O Orq 7 N 7 N p N M A O o N b 'yu O ,,. O O ,,. O O F R 01cc 1.0 7 M r 7 G, ! G, w 0 0 0 0 0 0 0 0 kc, O 1.0 O R '' OD w iy wC4R w z pn O .r bD R •� CC W 7 x IF April 22, 2026 ENGINEERING Hutchinson Utilities Commission Attn: Daniel Lang, Engineering Services Manager 225 Michigan Street SE Hutchinson, MN 55350 RE: Recommendation of Award of Contract Furnishing 115/13.8 kV Power Transformers — Plant 1 Substation DGR Project No. 428509 Dear Daniel: We have reviewed the bids received on April 15, 2026 for the above -referenced project. A bid summary form of the bid results is enclosed. We have checked the bids for mathematical accuracy and compliance with the bid specifications. We are hereby prepared to offer the following recommendation. When evaluating transformer bids, the "Total Evaluation Price" is used to determine the best bid. The Total Evaluation Price takes into account the losses the transformer will see over its expected lifespan. Large transformer losses will increase the total overall cost of the transformer, and vice - versa. Using this technique, it is possible that a transformer could cost more expensive initially, but end up being less expensive in the long -run. There were four (4) responsive bids received ranging in price from $2,505,351.00 to $3,277,910.00 for one (1) base bid transformer. The apparent low bid evaluated was received from Prolec GE Waukesha, who submitted a total price of $2,505,351.00 for one (1) transformer manufactured by Prolec GE. Prolec GE Waukesha has successfully completed similar projects for us in the past, and we know of no reasons why they would not perform well on this project. Pending legal review of terms and conditions, we recommend that you award the contract to Prolec GE Waukesha for a total price of $2,505,351.00. Please review our recommendation and feel free to contact us with any questions you or the Commission may have. Please let us know when an award has been made, and we will proceed with preparing the Contract Documents for signatures. We will be sending a copy of the bid summary to all bidders and plan holders. DGR Engineering — 1302 South Union Street — P.O. Box 511 — Rock Rapids, IA 51246 phone: 712.472.2531 — fax: 712.472.2710 — dgr.com \\I i irrdgI01 \Pi N\0,:\285\0\f:)rc\Sp c\Yfi°rii \"ritracL I)res\1 Lr IZcoin Awai d Viin 428509 docx Daniel Lang Page 2 April 22, 2026 Best Regards, DGR Engineering f Alex Richter, P.E. Enclosure: Bid Summary AMR:ste